Penang: The Malaysian Government must continuously engage with its United States (US) counterparts to negotiate a lower tariff rate, following Washington’s recent decision to impose a 25 per cent duty on goods from Malaysia, said Penang Chief Minister Chow Kon Yeow.

According to BERNAMA News Agency, Chow stated that the 25 per cent tariff is expected to impact Penang’s highly export-oriented economy, which is deeply integrated into global value chains. He noted that variations in tariff rates across the ASEAN region could distort trade dynamics and influence future investment decisions throughout the region.

Chow emphasized the urgent need for continuous engagement with US counterparts to negotiate a lower tariff rate. He made these remarks during a press conference after the launch of Penang Water Supply Corporation’s new RM5 billion Islamic Medium-Term Notes (IMTN) Programme (Sukuk Wakalah).

He also highlighted the importance of addressing non-tariff policies and trade barriers to safeguard Malaysia’s trade competitiveness. From January to May 2025, Penang accounted for 55 per cent of Malaysia’s total exports to the US, valued at RM52 billion. A substantial portion of these exports comes from US multinational corporations operating in Penang, primarily shipping finished products or components back to their parent companies.

Chow pointed out that electrical machinery and equipment made up 77 per cent of Penang’s exports to the US, largely driven by the semiconductor industry. While semiconductors are currently exempt from the tariff, the broader 25 per cent imposition still poses an economic risk.

Amidst these external challenges, Chow assured that Penang will work closely with the Federal Government and industry players to safeguard the nation’s economic interests. The state remains committed to enhancing infrastructure, streamlining business processes, and improving the cost of doing business to maintain its vital role in the global supply chain and ensure long-term economic resilience.