By Usha Muthusamy
KUALA LUMPUR, 01 August 2025: The United States has announced a reduction in its reciprocal tariff rate on Malaysian goods, lowering it from 25% to 19%. This adjustment, which is set to take effect seven days after July 31, 2025 (August 8), comes under an executive order signed by US President Donald Trump.
The Investment, Trade and Industry Ministry (MITI) has hailed this reduction as a significant achievement, underscoring Malaysia’s thorough and methodical negotiation process and strong inter-agency coordination. Minister Tengku Datuk Seri Zafrul Abdul Aziz stated that the 19% rate now broadly aligns with those faced by other major countries in the Southeast Asian region. Crucially, he emphasized that this rate was secured without compromising Malaysia’s sovereign right to implement key policies vital for its socio-economic stability and growth.
The new tariff structure, amending Executive Order 14257, imposes revised duties on multiple trading partners across ASEAN. Under this latest directive, Malaysia, along with Thailand, Indonesia, the Philippines, and Cambodia, will each face a 19% rate. Vietnam will see a slightly higher tariff of 20%, while Brunei is listed at 25%. Laos and Myanmar are set to face the highest rate at 40%, while Singapore continues to enjoy the lowest tariff among ASEAN nations at 10%.
The Housing and Local Government Minister, Nga Kor Ming, lauded the rate revision as a testament to Malaysia’s credibility as a reliable economic partner and the effectiveness of its diplomatic engagement on the global stage. Meanwhile, Datuk Seri Johari Abdul Ghani, a prominent figure, affirmed that the 19% tariff would not adversely affect the competitiveness of Malaysia’s commodities in global markets.
The United States remains Malaysia’s largest export market, with trade valued at RM198.65 billion and approved investments amounting to RM32.82 billion in 2024. In a reciprocal move, Malaysia will also implement zero or reduced tariff rates on over 11,000 US products entering the country, starting August 8.
The announcement has already had a positive impact on the local market, with Bursa Malaysia experiencing a midday rally, buoyed by improved investor sentiment following the tariff cut news. MITI has indicated it will continue to collaborate with other ministries and agencies to cushion any potential effects on Malaysian exporters and support small and medium enterprises (SMEs) in adjusting to the new tariff rate.
