Malaysia anticipates a potential decrease in U.S. tariffs on its exports as ongoing negotiations with Washington progress. On Monday, Prime Minister Anwar Ibrahim cautioned that lingering trade disputes could negatively impact the nation’s economic outlook.
Anwar informed Parliament during a special session that, while negotiations are still in the early stages, the U.S. government has agreed to continue discussions with Malaysia. If successful, these talks could lead to a reduction in reciprocal tariffs.
He pointed out that the temporary suspension of most tariffs until July had provided short-term relief and stressed that Malaysia is unlikely to meet its projected economic growth rate of 4.5 to 5.5% this year.
Anwar affirmed that the Ministry of Finance and Bank Negara are assessing the effects of tariffs and will adjust the gross domestic product growth forecast once there is clarity on the tariff policy and the results of ongoing negotiations with Washington.
On April 23, the International Monetary Fund revised Malaysia’s GDP growth forecast for this year, lowering it to 4.1% from the 4.7% projected in January.
Additionally, Malaysia has expressed readiness to negotiate with the U.S. to tackle non-tariff barriers, narrow its bilateral trade surplus, and explore the possibility of a formal trade agreement between the nations.
Anwar highlighted the government’s commitment to expanding trade opportunities while strengthening partnerships with key allies like China and the European Union. He also noted that discussions to enhance the free trade agreement between the ASEAN regional bloc and China are nearing completion, with trade ministers from participating nations scheduled to meet on May 19 to finalize the deal.
On April 2, the U.S. introduced a 24% tariff targeting Malaysian goods, in addition to a general 10% duty applied to imports from all countries. Although the Malaysia-specific tariffs have been temporarily suspended for 90 days to facilitate negotiations, the broader global tariff remains unchanged.
Meanwhile, Malaysia’s small- and medium-sized enterprises (SMEs) are urging the government to broaden the relief measures introduced on Monday to include non-exporters and non-manufacturers, who are also feeling the strain of US tariffs.
The Small and Medium Enterprises Association Malaysia emphasized that the government should temporarily halt the planned expansion of the sales and services tax, along with additional fees proposed by various agencies and local councils.
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