Kuala lumpur: The Ministry of Investment, Trade and Industry (MITI) reiterated that Malaysia’s semiconductor exports to the United States are currently still exempted from reciprocal tariffs. However, the ministry noted that this status is subject to potential changes based on ongoing US policy reviews.

According to BERNAMA News Agency, MITI minister Tengku Datuk Seri Zafrul Abdul Aziz highlighted that the US is conducting an investigation under Section 232 of its Trade Expansion Act of 1962. This investigation aims to assess whether imports of semiconductors, semiconductor manufacturing equipment, and related derivative products pose a national security threat. The investigation, initially set to conclude by the end of December, has been expedited. Its findings will guide further actions, including the possible imposition of high tariffs, as announced by US President Donald Trump.

During the Minister’s Question Time session in the Dewan Rakyat, Tengku Zafrul responded to a query from Lim Guan Eng (Bagan-PH) regarding the impact of potential US tariffs on imported semiconductors. The tariffs, reported to be around 100 per cent, would apply to countries that do not produce semiconductors in the US or have no plans to do so.

Tengku Zafrul outlined that Malaysia is proactively addressing the situation by engaging with the US Trade Representative and the Department of Commerce to seek official clarification and advocate for Malaysian exporters. He emphasized that if tariffs are implemented, Malaysia could lose a significant market, as locally produced products might become less competitive in the US.

He clarified that the current exemption is not blanket country-based but depends on companies that invest directly in the US, regardless of their home country. Thus, the impact on Malaysia is contingent on the investments and operations of international companies within the country. He also noted that 65 per cent of Malaysia’s semiconductor exports to the US originate from American companies operating in Malaysia.