Malaysia will not retaliate against US tariffs as talks continue

MALAYSIA'S has no plans to retaliate against a 25% tariff levied on its exports to the United States by Washington, its trade minister Tengku Zafrul Aziz said on Wednesday, saying he was "still optimistic" about reaching a trade deal.

AI Brief

Malaysia is negotiating with the US after being hit with a revised 25% tariff on key exports like semiconductors.
The deadline for talks has been extended to August 1, giving more time to address tariff scope and impact.
Southeast Asia, heavily reliant on exports, is among the hardest hit by Trumps broad tariff measures.

Speaking in an interview at the Reuters NEXT Asia summit in Singapore, Tengku Zafrul said Malaysia still had a few more weeks to negotiate the final terms of an agreement.

"I'm in touch with USTR (U.S. Trade Representative) as recently as yesterday, and we all agreed that we could continue our negotiations, so we still have time," he said.

"We are appreciative that the timeline has been extended to first of August," he added. "It gives me a bit more time to refine some of the discussion."

Malaysia, a key exporter of semiconductors and electronics, was slapped with a revised 25% tariff on its exports to the United States, higher than the 24% rate threatened in April before President Donald Trump called a 90-day pause.

"We have no plans to retaliate for now," Tengku Zafrul said.

Malaysian Prime Minister Anwar Ibrahim said on Wednesday he will raise some of the tariff-related issues during his meeting with U.S. Secretary of State Marco Rubio who is in Malaysia this week for ASEAN-related meetings.

The State Department billed the trip as a first visit to Asia by America's top diplomat and a demonstration of

Washington's commitment to the Indo-Pacific.

"Any unilateral tariffs will, of course, impact negatively on the economy of this country and this region. But we are still in the midst of negotiations," Anwar told reporters.

Malaysia's trade ministry said on Tuesday it was continuing discussions with U.S. counterparts to address pending issues, clarify the scope and impact of the tariffs and pursue avenues for a timely conclusion to the talks.

"I am optimistic, especially in sectors that I feel there is a win-win," Tengku Zafrul said.

Malaysia and other countries in Southeast Asia are among the hardest hit by Trump's sweeping tariffs, as they rely on exports and manufacturing to drive economies collectively worth more than $3.8 trillion, some helped by supply chain shifts from China.