US tariff reduced without compromising ‘red lines', says Miti
PETALING JAYA : The investment, trade and industry ministry says Malaysia made no compromise on its 'red lines' in negotiating a lower reciprocal tariff on exports to the US.
In a statement, it attributed the tariff reduction to a 'thorough and methodical negotiating process', adding that the 19% rate roughly tracked the rate of other countries in Southeast Asia.
'Most importantly, Malaysia stood firm on various 'red line' items.
'The 19% tariff rate was achieved without compromising the nation's sovereign right to implement key policies to support socio-economic stability and growth,' it said.
The US previously imposed a 25% tariff on Malaysia effective Aug 1, a rate which president Donald Trump described as 'far less' than what was needed to eliminate the country's trade deficit with Malaysia.
The rate was also higher than the 24% initially imposed on certain Malaysian exports to the US and placed on a 90-day pause, ending yesterday.
Last month, Prime Minister Anwar Ibrahim said Malaysia would not compromise on its Bumiputera policy during tariff negotiations.
Investment, trade and industry minister Tengku Zafrul Aziz later said that Malaysia's halal certification standards were also among the non-negotiable issues in the country's tariff negotiations with Washington.
The two issues were cited by the Office of the US Trade Representative as barriers leading to the 24% tariff initially imposed on April 2.
Zafrul said today that the decision by the US reflected its strong and enduring economic ties with Malaysia.
'It is also a testament to Malaysia's credibility as a reliable trade and investment partner,' he said.
Hashtags
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
Focus Malaysia
23 minutes ago
- Focus Malaysia
Zaid wants PMX, Tengku Zafrul to step down for bowing to US in lopsided tariff negotiation
PRIME Minister Datuk Seri Anwar Ibrahim and Investment, Trade and Industry Minister Tengku Datuk Seri Zafrul Abdul should resign for their complete surrender to US president Donald Trump who is a renowned tough negotiator. This is because if Malaysia had not agreed to buy US$240 bil worth of American goods, the tariff on Malaysian exports might probably stay at 25%. 'But instead of negotiating from a position of strength, they capitulated – and settled for a 6% reduction which brought the tariff down to 19%,' berated former de facto law minister Datuk Zaid Ibrahim in a social media post. Both PMX and Tengku Zafrul should resign for their complete surrender to Trump. If we had not agreed to buy US $240 billion worth of American goods, the tariff on our exports might have been 25%. But instead of negotiating from a position of strength, they capitulated—and… — Zaid Ibrahim (@zaidibrahim) August 4, 2025 'What did we get in return? A saving of US$2.6 bil/year (RM10.4 bil/year) over the next four years based on Malaysia's current export value of US$43 bil/year. 'In contrast, we committed to buying US$240 bil (RM1.02 tril) in American goods, effectively trading RM24 to save RM1. How is that sound economic policy?' For context, Tengku Zafrul told the Dewan Rakyat yesterday (Aug 4) that Malaysia has agreed to buy and invest o ver US$240 bil with the US to reduce or bridge the trade gap between both countries, eventually securing the 19% tariff rate. The key deals include: US$150 bil in purchases by multinationals in Malaysia's semiconductor, aerospace and data centre sectors over five years; US$70 bil in Malaysian investments in the US over 10 years; US$19 bil Boeing aircraft order by Malaysia Aviation Group (MAG) for fleet renewal; US$3.4 bil/year in LNG (liquefied natural gas) purchases by PETRONAS; US$42.6 mill/year in coal purchases by Tenaga Nasional Bhd; and US$119 mil in telecom product purchases by Telekom Malaysia Bhd. Can the Opposition fare better? Zaid further questioned why had the Madani government bowed down so easily to Washington's demand given that 'Trump has less than four years left in office'. 'His protectionist lunacy, like all things Trump, is likely to end in chaos – either at the ballot box or in the courts,' argued the opposition-slant UMNO member. Datuk Zaid Ibrahim 'Why then are we so gullible? Why did our leaders panic at the first sign of pressure from a volatile foreign president?' Added Zaid who once served momentarily as the defence counsel of now incarcerated former premier Datuk Seri Najib Razak: 'This is not diplomacy. This is economic appeasement which comes at the expense of Malaysia's sovereignty and long-term interests. 'If this is what the 'Madani economics' look like, we are in deeper trouble than we thought.' While sone commenters concurred that both PMX and Tengku Zafrul 'could have 'screwed up the negotiations', realistically, it would be impossible 'to negotiate from a 'position of strength' when you have no strength'. Interestingly, few commenters wondered if ever the table is turned with Zaid himself in PMX's or Tengku Zafrul's shoes, would the politician with turncoat tendency have fared better? – Aug 5, 2025
Malay Mail
23 minutes ago
- Malay Mail
MyKad or full price: Targeted RON95 subsidy plans to be unveiled by end-Sept, says MoF
KUALA LUMPUR, Aug 5 — The Ministry of Finance (MoF) said the detailed implementation plans for targeted subsidies for RON95 petrol will be announced by end-September 2025, in line with Prime Minister Datuk Seri Anwar Ibrahim's statement on July 23, 2025. In a written parliamentary reply, MoF said the government is actively developing and testing the subsidy targeting mechanism to ensure smooth execution upon rollout. 'This includes refining data from agencies such as the National Registration Department, Road Transport Department (JPJ), and the Department of Statistics Malaysia (DoSM),' it said. 'The government aims to adopt a more comprehensive approach to ensure RON95 subsidies reach the intended target groups.' MoF was responding to a question from Hulu Langat Member of Parliament, Pakatan Harapan's Mohd Sany Hamzan, who asked for an update on the subsidy retargeting implementation, particularly the front-end and back-end phases announced by the Ministry of Economy. According to MoF, once implemented, the retargeted subsidy mechanism will allow eligible Malaysians to enjoy RON95 at RM1.99 per litre through MyKad verification. Non-citizens and those ineligible for the subsidy will pay the unsubsidised market rate. — Bernama
Malay Mail
23 minutes ago
- Malay Mail
RMK13 on watch: Execution, discipline, and delivery — Ahmad Faiz Yazid
AUG 5 — The 13th Malaysia Plan (RMK13) outlines ambitious targets for 2026–2030: **4.5–5.5 per cent annual GDP growth and a fiscal deficit under 3 per cent by 2030**. It packages RM430 billion in five-year development expenditure (about RM86 billion per year) to drive these goals. Yet history reminds us that even large plans can stumble. RMK13's success will hinge on rigorous execution and fiscal discipline. We must not let it become another 'shelf document' of slogans and wish lists. Emphasising execution and fiscal discipline A recurring concern is that Malaysia's development blueprints often face a familiar hurdle: the implementation gaps. RMK13 itself warns that its effectiveness 'will depend more on how the money is spent' than the budget size. In other words, pouring cash into projects is not enough; we need strict controls to ensure timely, cost-effective delivery. This starts with reining in the ever-growing operating expenditure (OE) of the government. Under RMK13, operating costs (on wages, subsidies and debt servicing) are projected at a staggering RM1.81 trillion, much larger than the DE budget. If we fail to control these recurring expenses, even well-planned development spending cannot restore fiscal balance. In fact, interest payments alone now consume about 15 sen of every ringgit of revenue. Such non-productive debt servicing crowds out funds for schools, hospitals and infrastructure. Civil servants watch the live broadcast of the 13th Malaysia Plan (RMK13) presentation by Prime Minister Datuk Seri Anwar Ibrahim during a Bernama survey today. — Bernama pic In practical terms, each additional ringgit borrowed for debt repayment is a ringgit not available for growth initiatives. Over time, this undermines Malaysia's fiscal flexibility and risks crowding out investment. To keep the debt path sustainable, RMK13 must target a lower OE share of the budget. Any liberal subsidies or unchecked wage growth would dilute the gains from development projects. Hence, the plan's goals like halving the deficit mandate tough measures on spending. We should insist on annual budget reviews that explicitly map every expenditure line to the plan's targets, ensuring each ringgit advances a strategic outcome. History shows this is not a mere theory. Past auditor-general reports have exposed cost overruns and inefficiencies in state projects, with recent audits revealing irregularities in projects worth over RM48 billion. If RMK13 is to deliver its promise of productivity boosts and better living standards, it must include value-for-money checks on its biggest programs. For example, major infrastructure tenders and government-linked company ventures should be subject to rigorous audits and clear timelines. Transparent scorecards of progress (to be released each year) would keep implementation honest. In practice, this means linking the national budget to the plan's priorities so that voters and legislators can see exactly how policy commitments are funded. Beyond rhetoric: Linking plans to action Another risk is that RMK13 falls into the old ritual of planning without doing. In recent years, Malaysia's Five-Year Plans have become overloaded with frameworks and buzzwords, what critics call 'strategy soup'. Citizens outside the policy circles can barely recall the pillars of RMK12 or its '17 Big Shifts' under the Madani vision. This is not just an academic point: if people and even officials lose sight of the plan's core messages, implementation inevitably suffers. Therefore, RMK13 must break this cycle. It should be treated as a living contract with the nation, not a decorative launch event. The plan's authors (consisting of many government officials) and Cabinet must commit to institutional accountability. A first step would be to publish a frank 'report card' on RMK12, spelling out what policies worked, which fell short, and why. This would not only build trust but also guide better policy design. Going forward, every ministry budget (from 2026 onward) should be tagged against the plan's priorities, effectively making the budget a GPS to track the plan's journey. In other words, spending decisions cannot be made in a vacuum: each ringgit should contribute to specific plan targets (as if raising exports, cutting poverty, improving human capital). The plan's presentation itself should become simpler and more results-focused. Instead of drowning readers in dozens of sub-themes, it is recommended to focus on four or five outcomes that matter most to Malaysians, such as wage growth, affordable energy, efficient public services, digital skills and effective social safety nets. Clear KPIs (key performance indicators) for each outcome would then be set and publicised. For instance, goals like 'full employment by 2030' or 'average household income of RM12,000' should have intermediate milestones and timelines, not be vague ambitions. Other countries serve as proof of concept: South Korea runs a national dashboard tracking every agency's five-year targets, while Indonesia's planning agency links its development plan to real-time implementation updates. Malaysia can do the same. By reporting on progress quarterly or annually, perhaps via a user-friendly online portal, we turn the plan from a static document into an ongoing monitoring process. An empowered existing Economic Planning Unit under the Ministry of Economy or secretariat should be charged with keeping this data updated and public. Critically, citizen engagement must be built into RMK13. The plan should launch with an online platform where any Malaysian can check progress, download data, and even give feedback. Such a portal would help move away from opaque decision-making. If people can see which projects are on schedule and ask questions (or flag issues), political leaders will feel more accountable. Transparency breeds trust: a development plan becomes a genuine social contract with the rakyat, rather than an elite blueprint gathering dust. * Ahmad Faiz Yazid holds a Bachelor of Economics from Universiti Malaya and is currently a Graduate Executive Trainee at Permodalan Nasional Berhad (PNB). ** This is the personal opinion of the writer or publication and does not necessarily represent the views of Malay Mail.
