Malaysia Still Optimistic On Outcome Of US Tariff Talks

KUALA LUMPUR, July 9 (Bernama) -- Malaysia remains optimistic about the outcome of its tariff negotiation with the United States (US), banking on certain sectors that could be favourable to both countries, says Minister of Investment, Trade and Industry Tengku Datuk Seri Zafrul Aziz.

He said sectors where Malaysia is strong, such as the semiconductors sector, could provide a win-win proposition for both countries.

"I am optimistic, especially in sectors where I feel there is a win-win (factor) and they complement each other.

“Malaysia is a key player in the semiconductor sector, which supports the supply chain for the US semiconductor ecosystem. So we need to continue the discussion," he said during an online discussion at REUTERS NEXT Asia, here.

Tengku Zafrul said that he has been engaging with the US Trade Representative as recently as yesterday, and both parties agreed that they could continue negotiating as they still have time until Aug 1.

"There are challenges, of course, there are issues that we still need to resolve. Many have been resolved but unfortunately not according to the timeline that was set.. with the announcement by (US President Donald) Trump, we have a few more weeks of extension to negotiate on the final terms," he said.

He added that one of the issues raised was the trade balance. 

"Malaysia has a positive surplus against the US. Our trade surplus last year was around US$25 billion.

“The US administration wants to see this reduced, and also in areas where they feel that there are red tapes on certain products, such as agriculture (and) halal. So these are issues which we need to address. We're still discussing, of course, there are red lines as well,” he said.

Tengku Zafrul added that the parties had also talked about digital tax and issues pertaining to imports of certain products that may be harmful to Malaysia’s industries.

“So these are things which we are still negotiating on, but most of the issues, external issues, have been resolved. I believe that the time given, namely Aug 1, will give us more avenues to resolve issues that have yet to be addressed," he said.

On Monday, Washington announced that it is imposing a 25 per cent tariff on any and all Malaysian products sent into the country, separate from all sectoral tariffs, effective Aug 1 this year -- one per cent higher than what the US had announced in April.

However, Trump said that there would be no tariff if Malaysia or Malaysian companies decide to build or manufacture products within the US.

Malaysia has been negotiating to reduce the tariff with Washington since April, with the most recent round held on June 18.

-- BERNAMA