Malaysia said it will continue to engage with the US after President Donald Trump threatened to impose a steeper tariff rate unless the Southeast Asian nation reaches an agreement with his administration.
Trump said Malaysia would face a levy of 25%, higher than the 24% announced in April.
Malaysia will continue discussions with the US to address outstanding issues, clarify the scope and impact of the announced tariffs, and pursue avenues for the timely conclusion of negotiations, the Ministry of Investment, Trade and Industry said. Efforts are ongoing and reflect the Asian nation’s willingness to reach “a fair and sustainable outcome” for both countries, it added.
“Malaysia is committed to continuing engagement with the US towards a balanced, mutually beneficial, and comprehensive trade agreement,” the ministry said in a statement on Tuesday.
Trump unveiled on Monday the first in a wave of promised letters that threatened to impose higher tariffs on key trading partners, but suggested that he was still open to additional negotiations and pushed off increasing duties until at least Aug. 1. Malaysia was initially hit with the 24% reciprocal levy in April before Trump announced a 90-day pause, which moved the level to 10% on goods to facilitate talks.
Malaysia’s benchmark stock index fell as much as 0.7%, while the ringgit was little changed in late morning trade.
Investment, Trade and Industry Minister Zafrul Aziz had previously said Malaysia aimed to reduce US tariffs to below 10% for sectors critical to both economies. The Trump administration meanwhile wanted the country to address trade imbalances, non-tariff barriers and safeguard US technology from being channeled to other parties.
The US levies are expected to weigh on the Malaysian economy, with government forecasters planning to lower their 4.5% to 5.5% growth estimate. Zafrul had previously warned the tariffs would impact the economy for years to come.
The US ran a goods trade deficit with Malaysia of $24.8 billion last year, according to data from the Office of the US Trade Representative. The US was also the biggest foreign investor in Malaysia last year.
“Malaysia views unilateral measures as potentially disruptive to business operations, supply chains, and investment flows that benefit both countries,” the ministry said.
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Malaysia, US tariffs, trade agreement, Donald Trump, economic impact
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