Malaysia sees reducing the US' proposed tariff to 10% as a good outcome
Investment, Trade and Industry Minister Tengku Zafrul Aziz conceded that a previously hoped for levy of zero may not be possible. PHOTO: BLOOMBERG
KUALA LUMPUR – The US reducing its proposed tariffs on Malaysia to a 10 per cent baseline would be seen as a positive move, Investment, Trade and Industry Minister Tengku Zafrul Aziz said, conceding that a previously hoped for levy of zero may not be possible.
'To be fair, and the US has also been public about this, that the 10 per cent is not negotiable – it seems to be the floor,' he said in an interview with Bloomberg TV on May 27 on the sidelines of a regional summit in Kuala Lumpur.
'So for us, anything that can go below 24 per cent, or at least 10 per cent, the minimum' levy proposed by President Donald Trump in May 'would be good for our industries and for our exporters,' he said.
Malaysia had previously been in talks with Washington on reducing the tariffs.
In return, the Trump administration wants Malaysia to address trade imbalances, non-tariff barriers and safeguard US technology from being channelled to other parties and investments.
South-east Asian countries would be among the hardest hit by Mr Trump's levies, with rates as high as 49 per cent.
Officials from several countries in the region are working on deals to avert the higher tariffs, which have been put on hold for 90 days.
The US ran a goods trade deficit with Malaysia that hit US$24.8 billion (S$31.85 billion) in 2024, according to data from the Office of the US Trade Representative.
Malaysian negotiators are set to return to the table next week, Datuk Seri Zafrul said.
'What's important for us is to try and come to a win-win solution,' he said, adding the US is Malaysia's largest export market and its largest investor.
South-east Asian leaders began two days of talks from May 26 as they sought to deepen ties with China and Gulf nations and mitigate the fallout from any tariffs.
Malaysia, for its part, launched negotiations for a free trade agreement with the Gulf Cooperation Council.
At the same time, Malaysia is imposing stricter rules to address the issue of possible transshipment of sensitive materials through its entry and exit points to countries barred from receiving the goods.
The Investment, Trade and Industry Ministry announced in May that it will be the sole issuer of all non-preferential certificates of origin for shipment to the US effective May 6.
Mr Trump officials in 2025 pressured Malaysian authorities to crack down on what Washington said was semiconductor transshipment to China.
'The process so far has been quite smooth,' Mr Zafrul said in the interview, adding the issue would not impact trade to Malaysia. 'We have increased the capacity, resources to ensure that we do not have bottlenecks for the exporters to export to the US.' BLOOMBERG
Join ST's Telegram channel and get the latest breaking news delivered to you.
Hashtags
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
Straits Times
an hour ago
- Straits Times
US imposes sanctions on Los Chapitos, a faction of the Sinaloa Cartel
FILE PHOTO: U.S. Treasury Secretary Scott Bessent testifies before a House Financial Services Committee hearing entitled \"The Annual Testimony of the Secretary of the Treasury on the State of the International Financial System,\" on Capitol Hill in Washington, D.C., U.S., May 7, 2025. REUTERS/Nathan Howard/File Photo US imposes sanctions on Los Chapitos, a faction of the Sinaloa Cartel WASHINGTON - The United States on Monday imposed sanctions on Los Chapitos, a faction of the Sinaloa Cartel, labeling it a Specially Designated Global Terrorist as President Donald Trump's administration seeks to tackle cross-border drug trafficking. The U.S. Treasury Department in a statement said it designated Los Chapitos under illicit drug and terrorism authorities, accusing it of facilitating trafficking and production of fentanyl, the lethally potent opioid. Two of its fugitive leaders, both sons of convicted Mexican drug kingpin Joaquin "El Chapo" Guzman, were also hit with sanctions, according to the Treasury Department. "Los Chapitos is a powerful, hyperviolent faction of the Sinaloa Cartel at the forefront of fentanyl trafficking into the United States," Treasury Secretary Scott Bessent said in the statement. "At the Department of the Treasury, we are executing on President Trump's mandate to completely eliminate drug cartels and take on violent leaders like 'El Chapo's' children. Treasury is maximizing all available tools to stop the fentanyl crisis and help save lives." The Treasury on Monday also imposed sanctions on what it said was a regional network of Los Chapitos associates and businesses based in Mexico. Monday's action freezes any of their U.S. assets and generally bars Americans from dealing with them. Those that engage in certain transactions with the sanctioned parties also risk being hit with sanctions. The move comes after the Trump administration in February designated Tren de Aragua, the Sinaloa Cartel and other drug cartels as global terrorist organizations. Trump, a Republican, issued an executive order after taking office on January 20 that called on officials to evaluate whether any criminal cartels or transnational gangs should be designated as terrorism groups. The U.S. terrorism designations have come alongside a government crackdown on migration, with thousands of foreigners being deported to third countries in Latin America. REUTERS Join ST's Telegram channel and get the latest breaking news delivered to you.
Straits Times
an hour ago
- Straits Times
Trump hints he would support arrest of California Governor Newsom
FILE PHOTO: California Governor Gavin Newsom gestures while speaking, as he announces the Golden State Literacy Plan and deployment of literacy coaches statewide, at the Clinton Elementary School in Compton, California, U.S. June 5, 2025. REUTERS/Daniel Cole/File Photo Trump hints he would support arrest of California Governor Newsom WASHINGTON - U.S. President Donald Trump on Monday suggested that he would support an arrest of California Governor Gavin Newsom amid pro-immigration protests in the state, which prompted the president to deploy the National Guard. On Saturday, Tom Homan, the administration's border czar, threatened to arrest anyone who obstructs immigration enforcement efforts in the state, including Newsom and Los Angeles Mayor Karen Bass. Newsom responded during an NBC News interview by challenging Homan to "just get it over with" and move ahead with the arrest. Asked on Monday about Newsom daring Homan to arrest him, Trump said, "I would." REUTERS Join ST's Telegram channel and get the latest breaking news delivered to you.
Straits Times
an hour ago
- Straits Times
US, China begin key trade talks in London
US Secretary of Treasury Scott Bessent and Chinese Vice-Premier He Lifeng shake hands as they pose for a photo during trade talks at the Lancaster House in London. PHOTO: AFP LONDON - China and the United States began a new round of trade talks in London on June 9, Beijing's state media reported, as the world's two biggest economies seek to shore up a shaky truce after bruising tit-for-tat tariffs. The two sides are meeting in the historic Lancaster House, run by the UK Foreign Office, following a first round of talks in Geneva in May. Chinese Vice-Premier He Lifeng was again heading the team in London. Chinese state news agency Xinhua reported the start of the talks. Treasury Secretary Scott Bessent, Commerce Secretary Howard Lutnick and Trade Representative Jamieson Greer are leading the US delegation, President Donald Trump said on June 6. 'The meeting should go very well,' Mr Trump said on his Truth Social platform. His press secretary, Karoline Leavitt, told Fox News on June 8: 'We want China and the United States to continue moving forward with the agreement that was struck in Geneva.' While the UK government reiterated that it was not involved in the discussions, a spokesperson said: 'We are a nation that champions free trade.' UK authorities 'have always been clear that a trade war is in nobody's interests, so we welcome these talks', the spokesperson added. Rare earths The talks in London come just a few days after Mr Trump and Chinese President Xi Jinping finally held their first publicly announced telephone talks since the Republican returned to the White House. Mr Trump said June 5's call reached a 'very positive conclusion'. Mr Xi was quoted by Xinhua as saying 'correcting the course of the big ship of Sino-US relations requires us to steer well and set the direction'. Tensions between the two nations have soared, with Mr Trump accusing Beijing of violating a tariff de-escalation deal reached in Geneva in mid-May. (From left to right) US Trade Representative Jamieson Greer, US Secretary of Commerce Howard Lutnick, US Secretary of Treasury Scott Bessent, Chinese Vice-Premier He Lifeng, Chinese Commerce Minister Wang Wentao, and Chinese International Trade Representative and Vice-Minister of Commerce Li Chenggang, posing for a photo at the Lancaster House on June 9. PHOTO: AFP 'We need China to comply with their side of the deal. And so that's what the trade team will be discussing tomorrow,' Ms Leavitt said on June 8. A key issue will be Beijing's shipments of rare earths – crucial to a range of goods including electric vehicle batteries and which have been a bone of contention for some time. 'Rare earth shipments from China to the US have slowed since President Trump's 'Liberation Day' tariffs in April,' said Ms Kathleen Brooks, research director at trading group XTB. 'The US wants these shipments to be reinstated, while China wants the US to rethink immigration curbs on students, restrictions on access to advanced technology including microchips, and to make it easier for Chinese tech providers to access US consumers,' she added. In April, Mr Trump introduced sweeping worldwide tariffs that targeted China most heavily. At one point, Washington hit Beijing with additional levies of 145 per cent on its goods, prompting China to respond with tariffs reaching 125 per cent on US goods. After two days of talks in Switzerland, both sides agreed to slash the eye-watering tariffs for 90 days, but key differences remain – especially over China's rare earth export restrictions. The impact was reflected in the latest official export data released on June 9 in Beijing. Exports to the United States fell 12.7 per cent in May from the previous month, with China shipping US$28.8 billion (S$37 billion) worth of goods. This was down from US$33 billion in April, according to Beijing's General Administration of Customs. 'Green channel' Throughout its talks with Washington, China has also launched discussions with other trading partners – including Japan and South Korea – to try to build a united front to counter Mr Trump's tariffs. On June 5, Beijing and Canada agreed to regularise their channels of communication after strained ties. Beijing has also proposed establishing a 'green channel' to ease exports of rare earths to the European Union, and fast-tracking approval of some export licenses. China is expected to host a summit with the EU in July, marking 50 years since Beijing and Brussels established diplomatic ties. According to a spokesperson for Mr Starmer, Britain's finance minister Rachel Reeves took advantage of the talks in London to meet with her US counterpart Scott Bessent and Chinese Vice-Premier He Lifeng on June 8. AFP Join ST's Telegram channel and get the latest breaking news delivered to you.
