KUALA LUMPUR, May 15, 2025 — Malaysia's Trade Minister, Tengku Zafrul Aziz, has expressed optimism about reaching a trade agreement with the United States to reduce tariffs. This follows a recent meeting with U.S. Trade Representative Jamieson Greer during the Asia-Pacific Economic Cooperation (APEC) summit in Jeju, South Korea.Â
This meeting marks the second discussion between the two officials since Malaysia initiated formal negotiations with the U.S. two weeks prior. While specific details remain confidential, Minister Tengku Zafrul highlighted that key sectors such as aerospace and semiconductors are central to Malaysia's concerns.
Currently, Malaysia faces a 24% tariff rate on exports to the U.S., which is higher than that of the Philippines but lower than other regional peers like Vietnam and Thailand. The central bank of Malaysia has warned of economic slowdown risks due to global trade tensions, prompting a potential reduction in the country's growth forecast from 4.5%-5.5% to a lower range by 50-100 basis points.Â
Minister Tengku Zafrul aims for a resolution before the end of the 90-day pause announced by former President Trump. He noted that recent geopolitical de-escalations, such as U.S. trade developments with China and the UK, are encouraging signs for Malaysia's negotiations.
As Malaysia navigates these complex trade discussions, the outcome of the negotiations will be pivotal in shaping the country's economic trajectory, particularly for its key industries.
