KUALA LUMPUR, October 27 — Malaysia and the United States have signed a historic reciprocal trade agreement that strengthens economic cooperation and enhances market access between the two nations.
The deal, inked by Prime Minister Datuk Seri Anwar Ibrahim and US President Donald Trump at the Kuala Lumpur Convention Centre, maintains the US tariff rate on Malaysian goods at 19 per cent while exempting more than 1,700 key export items — including palm oil, rubber, cocoa, aircraft parts, and pharmaceuticals — from duties.
Investment, Trade and Industry Minister Datuk Seri Tengku Zafrul Abdul Aziz said the exemptions, valued at US$5.2 billion (RM21.96 billion), represent 12 per cent of Malaysia’s total exports. “In fact, the deal we sealed today offers us better access compared to what was previously announced,” he said.
Adding that the US administration also agreed to consider Malaysia’s semiconductor exports under Section 232 of the US Trade Expansion Act. Under the pact, Malaysia will grant preferential access for American exports across industrial and agricultural sectors — including machinery, vehicles, and dairy products — while addressing non-tariff barriers and streamlining regulations on food, cosmetics, and medical devices.
The agreement also ensures Malaysia refrains from restricting exports of critical minerals and rare earth elements to the US, a move seen as key to supporting America’s manufacturing and technology industries amid global supply chain shifts.
Tengku Zafrul said lower import tariffs will allow more competitive pricing for high-quality US products such as medical equipment, IT hardware, and machinery parts, supporting Malaysia’s industrial growth and aligning with the New Industrial Master Plan 2030.
“A more open and predictable trade environment will boost investor confidence and encourage US companies to expand their operations in Malaysia,” he said. The US, now Malaysia’s largest export market and top foreign investor with RM32.8 billion in 2024, reaffirmed its commitment to deeper economic ties under the new Comprehensive Strategic Partnership framework.
The trade agreement — signed during Trump’s first official visit to Malaysia in a decade — also includes large-scale purchases from the US, such as aircraft, semiconductors, and liquefied natural gas, marking a new era of cooperation between both nations.
Photo By: The White House
