Latest news with #AgreementonReciprocalTrade
Sinar Daily
6 days ago
- Business
- Sinar Daily
Malaysia must be ready for possibility of additional tariffs on semiconductors
Among the commitments made between Malaysia and the United States is the procurement of goods by multinational companies in the semiconductor, aerospace, and data centre sectors valued at US$150 billion over five years. 04 Aug 2025 04:43pm Tengku Datuk Seri Zafrul Abdul Aziz - Bernama photo KUALA LUMPUR - Malaysia must be ready and prepared for the possibility of additional tariffs being imposed on the semiconductor industry by the United States (US), said Minister of Investment, Trade and Industry Tengku Datuk Seri Zafrul Abdul Aziz. "Although semiconductor products are currently exempt from (US) retaliatory tariffs, they are under investigation pursuant to Section 232 of the Trade Expansion Act of 1962, which allows the US to impose additional tariffs on national security grounds,' he told Dewan Rakyat during a ministerial briefing on trade negotiations with the US. Tengku Zafrul emphasised that with the finalisation of the agreement with the US, the government is committed to ensuring Malaysia can continue to strengthen bilateral trade and investment, while maintaining strategic cooperation with other trading partners without sacrificing the nation's sovereignty and economic stability. - Bernama photo Tengku Zafrul said that to help reduce the bilateral trade deficit, the US is encouraging Malaysia to increase commercial considerations such as procurement from, and investment in, as part of the Agreement on Reciprocal Trade's (ART) "Section 6 - Commercial Consideration' that will be signed with the US soon. Among the commitments made between Malaysia and the United States is the procurement of goods by multinational companies in the semiconductor, aerospace, and data centre sectors valued at US$150 billion (US$1 = RM4.24) over five years. Meanwhile, Tengku Zafrul said the Ministry of Investment, Trade and Industry (MITI) will monitor the implementation of these commitments to ensure they are correctly executed and bring long-term benefits to the country. "For local industries, especially small and medium enterprises (SMEs), the MADANI government will continue to support them in facing these geopolitical challenges, including helping them adapt their business processes and exports to the US in response to the implementation of retaliatory tariffs. "MITI and its agencies will carry out outreach programmes for the relevant sectors soon,' he added. Tengku Zafrul emphasised that with the finalisation of the agreement with the US, the government is committed to ensuring Malaysia can continue to strengthen bilateral trade and investment, while maintaining strategic cooperation with other trading partners without sacrificing the nation's sovereignty and economic stability. - BERNAMA More Like This
The Sun
6 days ago
- Business
- The Sun
Malaysia prepares for potential US semiconductor tariffs, says Tengku Zafrul
KUALA LUMPUR: Malaysia must prepare for the possibility of additional US tariffs on semiconductor exports, said Investment, Trade and Industry Minister Tengku Datuk Seri Zafrul Abdul Aziz. He highlighted that while semiconductor products are currently exempt from retaliatory tariffs, they remain under investigation under Section 232 of the US Trade Expansion Act of 1962, which permits tariffs on national security grounds. Tengku Zafrul addressed the Dewan Rakyat during a briefing on US trade negotiations, noting that the US is encouraging Malaysia to increase commercial considerations, including procurement and investment, under the upcoming Agreement on Reciprocal Trade (ART). A key commitment includes US$150 billion in procurement by multinational firms in semiconductors, aerospace, and data centres over five years. To mitigate trade challenges, the government will support local industries, particularly SMEs, in adapting to geopolitical shifts. MITI will conduct outreach programmes to assist businesses in adjusting export strategies amid potential tariff implementations. Tengku Zafrul reaffirmed Malaysia's commitment to strengthening bilateral trade while safeguarding sovereignty and economic stability. The finalised agreement with the US aims to balance trade benefits with strategic global partnerships. - Bernama
The Star
6 days ago
- Business
- The Star
Tariff on Malaysian exports to US is reasonable, says Tengku Zafrul
KUALA LUMPUR: The newly imposed 19% tariff on Malaysian exports to the United States is considered reasonable and will not threaten the country's competitiveness, says Tengku Datuk Seri Zafrul Abdul Aziz. The Investment, Trade and Industry Minister stated that although Malaysia had hoped for a lower tariff rate, the negotiations' result was fair as it was achieved without compromising the nation's core policies or sovereignty. 'Among Asean countries, Malaysian goods remain competitive in the US market. While we were hoping for a lower rate, the ministry considers this outcome reasonable, given Malaysia's offer did not jeopardise any key national policies or our sovereignty, as aspired by the rakyat,' he said in Parliament on Monday (Aug 4). Tengku Zafrul said that the US is Malaysia's most important trading partner and top export destination, with nearly RM200bil in export value. He then said that this is ahead of China, and is one of the main sources of foreign direct investment this year. 'That's why we cannot afford to take any changes in trade policy with the US lightly. It will have a serious and negative impact on Malaysia,' he warned. He cited the electrical and electronics (E&E) sector as an example, saying that about 100,000 jobs, particularly in Penang and Kedah, are at risk if Malaysia cannot export these products to the US due to unfavourable trade terms. The minister said Malaysia and the US have agreed in principle to an Agreement on Reciprocal Trade (ART), which outlines detailed commitments reached during negotiations. Tengku Zafrul said this covers six key areas; tariffs and quotas, non-tariff barriers, digital trade and technology, rules of origin, economic and national security, and commercial considerations. 'The agreed improvements directly enhance the ease of doing business, making Malaysia more competitive and attractive as a leading investment destination in the region,' he said. Tengku Zafrul said the government's ongoing reform efforts are already bearing fruit, as reflected in the country's improved position in the World Competitiveness Ranking. On tariffs, Tengku Zafrul said Malaysia has agreed to reduce or eliminate import duties on 98.4% of all tariff lines for US imports. While excise duties remain untouched, he said sales tax exemptions will apply to certain US agricultural products such as dairy and seafood. Regarding digital trade, he said Malaysia has agreed to three key points: not to impose a discriminatory digital service tax on US companies; to drop the requirement for American cloud and social media providers to contribute 6% of revenue to the Universal Service Fund (USF); and to permanently lift the directive requiring all domain name system (DNS) traffic to be routed through local DNS services. However, Tengku Zafrul emphasised that Malaysia rejected several US demands that risked national sovereignty. 'Cloud service providers and social media platforms remain subject to Malaysia's criminal laws. The government retains the right to request source code transfers for use in critical infrastructure, government procurement and the financial sector,' he said. On economic and national security, Zafrul said Malaysia agreed to strengthen controls under Section 12 of the Strategic Trade Act, enforced since July 14, to address US concerns about the export and transit of artificial intelligence (AI) chips to third countries. 'Malaysia has also committed not to impose any export restrictions on rare earth elements and critical minerals to the US. But this does not grant the US exclusive rights over our supply,' he clarified. Tengku Zafrul added that both nations are in the final stages of agreeing on a joint statement, which will be issued soon, detailing the outcomes and commitments of the negotiation. 'The government remains committed to ensuring transparency and balance, protecting both the intellectual property of companies and Malaysia's sovereignty, security and economic stability,' he said.
New Straits Times
6 days ago
- Business
- New Straits Times
Malaysia, US set to ink trade agreement
KUALA LUMPUR: Malaysia and the United States (US) are expected to formalise their tariff and trade commitments through a new Agreement on Reciprocal Trade (ART), which will serve as a binding framework for future bilateral economic cooperation. Investment, Trade and Industry Minister Tengku Datuk Seri Zafrul Abdul Aziz said while a principled agreement had been reached as of July 31, the commitments will be codified in a formal document to be signed by both governments. A joint statement is also being finalised. "The commitments made during the negotiations will be detailed in the form of a trade agreement document, namely the Agreement on Reciprocal Trade (ART), which will be signed by both parties," he told the Dewan Rakyat today. The ART will cover six main areas namely, tariffs and quotas, non-tariff barriers, digital trade and technology, rules of origin, economic and national security, and commercial considerations. The Investment, Trade and Industry Ministry (MITI) will coordinate the implementation and monitoring of all agreed commitments. "MITI will monitor the implementation of the agreed commitments and ensure they are executed properly and bring long-term benefits to the country," said Tengku Zafrul. He said the negotiations provided Malaysia an important opportunity to reflect on and reform government policies, particularly outdated procedures and overlapping regulations that hinder trade and investment. "These negotiations served as a critical opportunity for Malaysia to reassess policies, processes and existing bureaucracy, particularly regarding non-tariff barriers and outdated or overlapping procedures," he said. Tengku Zafrul said these reforms are already bearing fruit, citing Malaysia's 11-place jump in the 2025 World Competitiveness Ranking (WCR) to 23rd, its best showing since 2020. "The tangible results of reforms implemented by the government can be seen in Malaysia's rise of 11 positions in the 2025 WCR from 34th to 23rd out of 69 economies," he said. A joint statement between Malaysia and the US outlining the agreed commitments will be issued soon. Discussions are ongoing to finalise the details of the ART, which both parties aim to sign in due course.
Yahoo
30-07-2025
- Business
- Yahoo
Coffee and cocoa could be exempt from tariffs in trade deals, commerce secretary says
By Marcelo Teixeira NEW YORK (Reuters) -Natural resources that are not grown in the United States, including coffee and cocoa, could be exempt from import tariffs when trade deals with producing countries are reached, U.S. Commerce Secretary Howard Lutnick said on Tuesday. Lutnick said in an interview for CNBC's talk program 'Squawk Box' that President Donald Trump has agreed to set zero tariffs for those natural resources that are not grown in the U.S. in the trade deals he has closed, including the ones with Indonesia and the European Union. "If you grow something and we don't grow it, that can come in for zero, so if we do a deal with a country that grows mangos, pineapple, then they can come in without a tariff, because coffee and cocoa will be other examples of natural resources," Lutnick said. "So Europe came in with cork, for example. That can come in to the U.S. without a tariff," he said. A part of the text of the 'Agreement on Reciprocal Trade between the United States and Indonesia' that was published last week by the White House cites natural resources. It says that the U.S. "may also identify certain commodities that are not naturally available or domestically produced in the United States for a further reduction in the reciprocal tariff rate". Indonesia agreed with a tariff of 19% to sell its products in the U.S., but could eventually have zero tariff for its coffee, cocoa, or other tropical products. Lutnick however did not comment on the situation of tropical products coming from countries that still do not have a deal with the U.S., such as Brazil. Trump threatened to impose a 50% tariff on Brazilian products from August 1 in a move that also involves politics, as the U.S. President complained about the treatment Brazilian courts are giving to former Brazilian president and his ally Jair Bolsonaro. Brazil supplies a third of the coffee used in the U.S., the world's largest drinker of the beverage, and that trade could be heavily impacted if tariffs are indeed imposed. Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
