Malaysia remains competitive despite new US tariff rates - MITI

KUALA LUMPUR: The Ministry of Investment, Trade and Industry (MITI) has reiterated that Malaysia remains in an overall competitive position despite the new tariff rates imposed on the country by the United States.

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The US imposed 19% tariffs on Malaysian goods starting August 8, slightly reduced from the initial 25%.
MITI chose negotiation over retaliation, resulting in more balanced outcomes and minimal impact on exports.
MITI and agencies like MATRADE and MIDA are helping industries through roadshows and investment strategies in high-value sectors.

MITI stated that the government's decision not to take retaliatory action, but instead to pursue prudent negotiations, has yielded pragmatic and balanced results.

On July 31, 2025, the United States announced the imposition of reciprocal tariffs on Malaysia at a rate of 19 per cent, effective Aug 8, 2025.

MITI said that although the tariff rate had been reduced to 19 per cent from 25 per cent, there will be some impact, although at a minimal level compared to before.

"The imposition of the tariff is expected to have a direct impact on the demand for Malaysian products in the US market. This is because the increased tariffs will lead to higher import costs, which in turn will raise product prices in the US, and there is a possibility that US importers may pressure Malaysian exporters to bear the cost of these reciprocal tariffs," it said in a written response on the parliament's website on Tuesday.

MITI made the statement in response to a question from Senator Datuk Mustafa Musa regarding the impact and adjustments to Malaysian industries following the US's decision to reduce reciprocal tariffs on Malaysia to 19 per cent.

Acknowledging the primary impact on Malaysian exports due to these tariffs, the MADANI Government, through MITI and its agency, the Malaysia External Trade Development Corporation (MATRADE), has implemented mitigation measures. This includes conducting roadshows to affected industrial sectors to provide information on the implementation of the tariffs and available support opportunities, it said.

In addition, MITI and the Malaysian Investment Development Authority (MIDA) have also implemented several strategies to encourage investment in high value sectors that can contribute to industrial development, ecosystem growth, and strengthening of the local supply chain, the ministry added.

-- BERNAMA