Kuala lumpur: The Malaysia-United States (US) Reciprocal Trade Agreement (ART) is designed with clauses that prioritize national sovereignty, ensuring its implementation aligns with Malaysia’s economic interests, security, and domestic laws. Investment, Trade and Industry Minister Tengku Datuk Seri Zafrul Abdul Aziz emphasized the significance of these provisions during a special briefing session at the Dewan Rakyat.

According to BERNAMA News Agency, the agreement requires any US measures aimed at addressing trade imbalances to be negotiated for mutual understanding. Tengku Zafrul highlighted that Article 5.1.1 should not be interpreted as Malaysia’s compliance with US sanctions on other countries. Instead, it provides Malaysia with legal and diplomatic flexibility to avoid actions against other countries, as it operates under domestic laws, regulations, and mutually acceptable timelines.

Tengku Zafrul noted that Malaysia can take trade actions in line with its own laws and timelines if necessary, while ens
uring such measures address shared economic concerns with the US. He pointed out that the US remains Malaysia’s largest export market, with bilateral trade in 2024 reaching RM325 billion, including RM198.65 billion in exports from Malaysia to the US. From January to September this year, Malaysia exported RM166.38 billion to the US.

He stressed the importance of defending access to this key market, even amid unilateral reciprocal tariff pressures from the US government, asserting the need for negotiation in Malaysia’s economic interest. Tengku Zafrul announced that Malaysia initiated negotiations with the US in May 2025 to secure lower tariff rates, aiming to maintain competitive Malaysian exports.

On April 2, 2025, Malaysia faced a 24 percent tariff from the US, later increased to 25 percent in July 2025, due to trade imbalances. Following six months of negotiations, Malaysia successfully reduced the US-imposed tariff from 25 percent to 19 percent, the lowest rate for ASEAN countries with a trade surplus wi
th the US.

Tengku Zafrul warned that without the immediate signing of the ART agreement, Malaysia risks the US government reinstating or increasing the original 24 percent tariff rate. The negotiations have also elevated Malaysia-US relations to a Comprehensive Strategic Partnership.