Kuala lumpur: Malaysia stands a 55 per cent chance of reducing the final United States (US) tariff to a 15 per cent-19 per cent range from the current 25 per cent, if positive trade agreements are reached, said Apex Securities Bhd. The stockbroking firm revealed that recent developments in US trade negotiations provide a promising outlook for Malaysia.
According to BERNAMA News Agency, the recent US-Indonesia trade deal, which saw the tariff being reduced to 19 per cent from 32 per cent, is an encouraging sign for Malaysia, supporting the view that Washington remains open to negotiations if meaningful concessions are offered. The US Trade Representative’s 2025 National Trade Estimate Report identified several structural trade and investment barriers in Malaysia, highlighting the cabotage policy as the most likely area for reform.
Apex Securities anticipates that Malaysia may propose a framework for the permanent exemption of foreign vessels engaged in submarine cable repairs within Malaysian waters. Regarding foreign equity restrictions, sectors such as logistics and construction might witness partial liberalisation. However, strategic industries like oil and gas, telecommunications, and finance are unlikely to see changes due to sovereignty and national security concerns.
In the automotive sector, full liberalisation seems improbable, but targeted tariff reductions on US-made vehicles may be considered as a trade-off. With respect to government procurement and halal certification, Apex Securities does not foresee any shift in stance, as Malaysia’s bumiputera policy remains politically sensitive and non-negotiable.
To enhance bargaining power, Malaysia might need to increase imports of US goods, such as liquefied natural gas, agricultural commodities, Boeing aircraft, or potentially defence assets. Collaboration in emerging sectors like nuclear technology or small modular reactors is plausible but constrained by high capital costs.
If the base-case scenario materialises and the tariff is reduced to 15 per cent to 19 per cent, it would help preserve Malaysia’s export competitiveness and maintain macroeconomic stability, projecting a GDP growth of 4.1 per cent to 4.2 per cent in 2025. Apex Securities assigns a 40 per cent probability to a bearish scenario where the final tariff remains at 20 per cent or higher, potentially impacting GDP growth.
The best-case scenario, albeit with low probability, suggests a tariff reduction to 10 per cent to 14 per cent. Apex Securities believes that Malaysia’s underlying fundamentals remain strong given its significant role in the global semiconductor sector and comparative regional advantage. However, it warns of challenges beyond 2026 due to potential ongoing tariff tensions with the US.