Malaysia and the United States have reached an agreement resulting in zero tariffs for nearly 7,000 tariff lines, predominantly benefiting US exporters of agricultural and industrial goods. Under the new terms, 6,911 out of 11,260 tariff lines requested by the US, spanning fruit, meat, grain, dairy, and many manufacturing products, will be zero-rated starting August 8, 2025. This major tariff concession represents about 61% of the total product lines in the bilateral negotiations, with the remaining 39% seeing reduced rates.
The negotiations aimed to strengthen bilateral trade by eliminating or reducing tariffs on 98.4% of all lines the US submitted for consideration, ensuring comprehensive coverage of US export interests. Items like dairy, poultry, fruits, and sanitary products are specifically highlighted as newly zero-rated for entry into Malaysia. Meanwhile, Malaysia secured continued duty-free access for its semiconductor and pharmaceutical exports to the US, though most other sectors will face a new 19% ad valorem duty on exports to the US, down from an initially proposed 25%.
Malaysia held firm on certain strategic “red lines” by refusing US demands for blanket liberalization of several key industries. Malaysia’s government maintained the excise duties on vehicles, tobacco, and alcohol, and retained import licensure and foreign equity restrictions for strategic sectors. Regarding halal certification, Malaysia will not revise its standards but will support the compliance process for US exporters, keeping requirements syariah-compliant.
This deal, reached after months of negotiations ending July 31, 2025, signals a stronger trading partnership. Both nations emphasized the practical benefits to exporters and the commitment to fair trade, while Malaysia prioritized protecting its economic sovereignty and domestic industry competitiveness.
(Sources: New Straits Times)
