Pharmaceutical, semiconductor sectors excluded from US tariffs: Tengku Zafrul
"Currently, exports of semiconductors and pharmaceutical products remain at a zero per cent tariff rate," Tengku Zafrul said at a media briefing today.
This comes as the US imposes a reduced 19 per cent tariff on Malaysian imports.
Tengku Zafrul noted that the broader 19 per cent levy on Malaysian goods will begin on Aug 8.
He also clarified that no agreement has been reached with the US or any other country on the exclusive supply of rare earths, pushing back on speculation that Malaysia had made concessions in the critical minerals sector.
"In fact, no such request has been made by the US so far," he said.
Rare earth access remains a sensitive issue in US trade negotiations, especially as China dominates 90 per cent of global processing capacity. Similar discussions are also taking place between the US and Indonesia.
Tengku Zafrul stressed that Malaysia held firm on several key matters throughout the discussions, including the protection of its financial sector, Bumiputera policies and government procurement practices.
"Malaysia's red lines were not crossed, nor were our sovereign rights compromised," he said.
He added that Malaysia will continue to advocate for zero tariffs on commodities such as cocoa, rubber and palm oil exported to the US, which are currently subject to duties of 19 per cent.
As part of broader economic engagement, Malaysia has also committed to buying an additional 30 Boeing aircraft from the US in a deal worth US$9.5 billion, matching the value of an earlier acquisition phase.
Tengku Zafrul said Malaysia will continue to impose excise duties on US imports of cars, tobacco and alcohol.
He noted that halal imports from the US must still comply with certification requirements set by the Department of Islamic Development Malaysia.
Elaborating on the "red lines", Tengku Zafrul said the cut from 25 to 19 per cent was achieved without compromising Malaysia's sovereign right to maintain key policies for socio-economic stability.
"This positive outcome was the result of continuous engagement between both countries through various bilateral platforms, and reflects the high level of complementarity between Malaysia and the US in trade and investment over the past 60 years," he said.
He added that the 19 per cent rate is broadly in line with tariffs imposed on other Southeast Asian countries.
"Most importantly, Malaysia's position did not shift on matters within our red lines.
"The 19 per cent rate was achieved without compromising our sovereignty in implementing important policies that support the country's socio-economic stability and growth.
"The US decision reflects the strong and enduring economic relationship between the two countries, and Malaysia's credibility as a trusted trade and investment partner," he said.
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