US-Malaysia tariff deal expected after Trump-Anwar phone call on eve of Aug 1 deadline
KUALA LUMPUR - United States President Donald Trump and Malaysian Prime Minister Anwar Ibrahim have engaged in a long-awaited phone call on July 31, just a day ahead of Washington's Aug 1 deadline before a
25 per cent import tariff is due to apply on Malaysian products.
Official sources told The Straits Times that a deal to lower the tariff rate to a maximum of 20 per cent or as low as 15 per cent 'should be' announced by Aug 1. Kuala Lumpur conceded on several issues including halal certification and the supply of rare earths, a critical mineral used in advanced technological applications.
'The call was made earlier this morning after it was proposed by the Americans just a few hours back,' said a top Malaysian government official with direct knowledge of the matter.
According to several Malaysian trade and economic officials, KL is set to recognise US halal certification on several products, including pharmaceuticals. This move will likely remove the need for US products to validate their halal credentials with the Malaysian Islamic Development Department.
Malaysia is also set to supply the US with rare earths elements. The country currently holds rare earths deposits of more 16 million tonnes that are worth an estimated RM1 trillion (S$302 billion). Rare earths ore mined in Malaysia are currently exported to China since Malaysia lacks the requisite technology to process it.
Washington has made the pursuit of rare earths a key component of its national security strategy, as China dominates production of the mineral. Various forms of rare earths are used in a wide range of tech equipment from mobile phones and power generators to defence technology.
Malaysia's equity quotas for bumiputeras -- a term used to collectively refer to its Malay majority and indigenous tribes -- was another controversial issue that emerged in Malaysia-US tariff talks. Removing such a key, long-standing aspect of Malaysian economic policy though, would not be politically tenable for the Anwar government.
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The Anwar-Trump phone call occurred after US Secretary of State Marco Rubio spoke with Malaysian Foreign Minister Mohamad Hasan on July 30 (US time) on
the ceasefire that Kuala Lumpur facilitated over the ongoing Thailand-Cambodia border dispute.
Mr Anwar facilitated the successful peace talks on July 28 afer Mr Trump threatened to halt tariff negotiations with Thailand and Cambodia unless they came to the table to end the two-month-long conflict which has killed dozens.
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