Malaysia studying measures to help reduce US trade deficit, says Senior Trade Official

WASHINGTON: Malaysia is exploring various initiatives to help reduce the United States' trade deficit, particularly in the context of bilateral trade relations.

According to Mastura Ahmad Mustafa, Deputy Secretary-General (Trade) at the Ministry of Investment, Trade and Industry (MITI), reciprocal tariffs are intended to address what the U.S. sees as trade barriers to its goods and to reduce its trade deficit with key partners.

“If we look at the objective behind the Trump administration’s imposition of reciprocal tariffs, it stems from trade barriers that make it difficult for US products to enter partner countries. The main issue is the trade deficit,” she said.

In response, Malaysia is reviewing potential initiatives to ease the US trade deficit, including reassessing any existing barriers that might hinder the entry of US goods into the Malaysian market.

However, Mastura emphasised that Malaysia maintains a low average import tariff rate of around 5.6%, limiting the room for negotiation on tariff reductions.

“We're also looking at other areas, especially non-tariff barriers, which are more focused on improving the ease of doing business,” she added. “Even as we offer concessions to the US, these steps ultimately enhance our own business environment, making Malaysia more competitive not only with the U.S. but also with other trading nations.”

A Malaysian delegation is currently in Washington, D.C., for meetings with U.S. Trade Representative Jamieson Greer and Secretary of Commerce Howard Lutnick on April 24.

Mastura said the delegation has also met with several U.S. companies operating in Malaysia and other stakeholders to gather feedback and insights.

"That’s when we’ll present Malaysia’s proposals to find a resolution to this matter," she said. "Over the past few days, we’ve mainly met with US firms with subsidiaries in Malaysia. We want to gauge the sentiment here, especially since Malaysia isn’t the only country holding talks with the US—several others are also here to make their own offers."

She stressed that these engagements are crucial to better understand the situation, especially with uncertainty remaining over what decision the US administration will make once the 90-day tariff suspension ends on July 9.