Malaysia has agreed to purchase and invest over USD 240 billion with the United States to help narrow the trade deficit and secure a reduction in US reciprocal tariffs, from 25% to 19% on Malaysian exports, following a series of high-level negotiations. According to Investment, Trade and Industry Minister Tengku Zafrul Abdul Aziz, these commercial commitments are spread across multiple sectors and will be formalized in a new bilateral trade agreement expected to be signed soon.
Key elements include USD 150 billion in purchases by multinational companies in Malaysia’s semiconductor, aerospace, and data center sectors over five years, and USD 70 billion in Malaysian investments in the US across a decade. Major one-off and recurring transactions feature a USD 19 billion Boeing aircraft order by Malaysia Aviation Group (MAG) for fleet renewal, Petronas signing 20-year contracts to import USD 3.4 billion of LNG per year from US suppliers, Tenaga Nasional Bhd agreeing to annual coal imports valued at USD 42.6 million, and Telekom Malaysia making telecommunications equipment purchases worth USD 119 million annually.
The Boeing aircraft deal is highlighted as part of MAG’s long-term strategy rather than a response to tariff negotiations and supports the Malaysian aerospace supply chain, including local integrators like Boeing Composites Malaysia and SME Aerospace. On the energy front, Petronas’s LNG deals secure diversified energy sources, while Tenaga Nasional’s and Telekom Malaysia’s purchases strengthen critical infrastructure and supply resilience.
Crucially, while Malaysia offers significant trade and investment concessions, including reducing or eliminating duties on 98.4% of US imports, easing non-tariff barriers, and removing prior revenue-sharing requirements for US digital firms, the government has maintained national interests, such as Bumiputera equity requirements in strategic sectors and refusing to fully liberalize sensitive industries. Tariff exemptions for semiconductors and pharmaceuticals remain, but Malaysian chips could face further scrutiny under certain US national security provisions.
(Source: Reuters, The Edge Malaysia)
