Malaysia Stands 55 Pct Chance Of Lower US Tariffs At 15-19 Pct -- Apex Securities
KUALA LUMPUR, July 17 (Bernama) -- Malaysia stands a 55 per cent chance of reducing the final United States (US) tariff to a 15 per cent-19 per cent range from the current 25 per cent, if positive trade agreements are reached, said Apex Securities Bhd.
The stockbroking firm said the recent US-Indonesia trade deal, which saw the tariff being reduced to 19 per cent from 32 per cent, is an encouraging sign for Malaysia, supporting the view that Washington remains open to negotiations if meaningful concessions are offered.
It said that after the US Trade Representative’s 2025 National Trade Estimate Report identified several structural trade and investment barriers in Malaysia, the cabotage policy emerged as the most likely area for reform.
“We anticipate that Malaysia may offer a framework for the permanent exemption of foreign vessels engaged in submarine cable repairs in Malaysian waters,” it said in a note today.
As for the request to lift foreign equity restrictions, Apex Securities said that while sectors such as logistics and construction could see partial liberalisation, more strategic industries, namely oil and gas, telecommunications, and finance, are unlikely due to sovereignty and national security considerations.
“As for the automotive sector, full liberation is unlikely. However, targeted tariff reductions on US-made vehicles may be offered as a trade-off,” it said.
On government procurement and halal certification, Apex Securities also did not expect any shift in stance, as Malaysia’s bumiputera policy is politically sensitive and widely viewed as non-negotiable.
“The most feasible concession may involve streamlining the certification process to facilitate US meat imports,” it said.
Apex Securities said that given limited negotiating leverage, Malaysia might need to pivot towards increasing imports of US goods, such as liquefied natural gas, agricultural commodities, such as corn and soyabeans, Boeing aircraft, or possibly defence assets.
“Collaboration in emerging sectors such as nuclear technology or small modular reactors is plausible but constrained by high capital costs,” it added.
The brokerage firm said that if the base-case scenario materialises, where the tariff is slashed to 15 per cent to 19 per cent, the outcome would help preserve Malaysia’s export competitiveness and maintain macroeconomic stability, leading to a forecasted gross domestic product (GDP) growth of 4.1 per cent to 4.2 per cent in 2025.
Meanwhile, the firm assigned a 40 per cent probability to a bearish scenario, where the final tariff settles at 20 per cent or higher.
“If tariffs reach 25 per cent or higher, GDP growth could fall below four per cent, especially if BRICS-related tariffs are concurrently introduced,” it said.
As for the best-case scenario, Apex Securities projected that it could be 10 per cent to 14 per cent, but with low probability.
“An outcome below 15 per cent would be highly favourable, but is unlikely (five per cent probability) due to domestic political constraints on liberalisation,” it said, adding that a 15 per cent tariff would lift the 2025 GDP growth to 4.2 per cent.
Despite near-term risks, Apex Securities believes that Malaysia’s underlying fundamentals remain resilient given its pivotal role in the global semiconductor sector and comparative regional advantage, as other ASEAN countries, such as Thailand and Cambodia, have been hit with a 36 per cent tariff.
“But the bigger challenge lies in 2026 and beyond, when on-and-off tariff tensions triggered by the US become the new normal,” it cautioned.
-- BERNAMA