Malaysia hails 19pc US tariff as positive outcome, markets rebound on economic plan
Published on: Fri, Aug 01, 2025
By: The Edge Text Size: KUALA LUMPUR: Malaysia has welcomed the lower-than-expected 19pc US tariff on its exports as a 'positive outcome', with the government pledging steps to mitigate the impact while advancing long-term industrial reforms. The announcement came as local markets reacted positively to both the tariff decision and the unveiling of the 13th Malaysia Plan (13MP). The Ministry of Investment, Trade and Industry (Miti) said Malaysia had stood firm on key policy red lines during negotiations, securing the tariff rate without compromising its sovereign right to implement critical socio-economic policies. Minister Tengku Datuk Seri Zafrul Abdul Aziz said the deal reflected Malaysia's credibility as a reliable trade and investment partner, expressing gratitude to US counterparts for their cooperation. To counter the tariff's effect on exports, Miti will promote the use of Malaysia's 18 free trade agreements, support small and medium enterprises, and advance key industrial strategies including the New Industrial Master Plan 2030, the Green Investment Strategy, and the National Semiconductor Strategy. Miti also plans outreach programmes to help exporters adapt and aims to strengthen US-Malaysia trade ties. Despite global economic uncertainties, Malaysia's strong domestic demand, policy reforms, and infrastructure pipeline are expected to buffer external shocks. The US is Malaysia's largest export market (RM198.65 billion) and top source of foreign investment (RM32.82 billion in 2024). Investor sentiment was buoyant on Friday, with the FBM KLCI rising to 1,533.10 points before pausing at 1,531.97, reversing previous losses and outperforming broader Asian markets. Gains were led by banking and construction stocks, notably CIMB (+4pc) and Gamuda (+4.2pc). The US tariff announcement and the RM430 billion 13MP development plan, averaging RM86 billion annually through 2030, drove optimism particularly for infrastructure and renewable energy sectors. Analysts from Phillip Capital and Hong Leong Investment Bank said the tariff outcome was milder than expected, and the government's focus on long-term infrastructure builds investor confidence. While the ringgit weakened slightly against the US dollar, government bonds held steady, indicating continued investor confidence in Malaysia's macroeconomic direction. * Follow us on our official WhatsApp channel and Telegram for breaking news alerts and key updates! * Do you have access to the Daily Express e-paper and online exclusive news? Check out subscription plans available.
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