KUALA LUMPUR (Oct 26): The governments of the United States of America and Malaysia reached a pact on an agreement on reciprocal trade to strengthen bilateral economic relationship, which will provide both countries’ exporters unprecedented access to each other’s markets.
“The Agreement will build upon our longstanding economic relationship, including the United States-Malaysia Trade Investment Framework Agreement signed in 2004,” the joint statement read.
Key terms include Malaysia committing to provide significant preferential market access for US industrial goods and exports, including chemicals, machinery and electrical equipment, metals, passenger vehicles, and for US agricultural exports including dairy, horticultural products, poultry, processed products, beverages, pork, rice and fuel ethanol as well.
The US meanwhile has committed to maintain at 19% the reciprocal tariffs first set on April 2, 2025, as amended, on originating goods of Malaysia, and has identified products— from a list set out on Sept 5, 2025, Potential Tariff Adjustments for Aligned Partners— to receive a 0% reciprocal tariff rate.
Malaysia the joint statement says, has committed to address non-tariff barriers that affect bilateral trade in priority industrial areas, and is committed to accepting US manufactured vehicles built to US motor vehicle safety and emissions standards; streamlining import licences for US alloy steel and pipe products, and steel-containing goods; streamlining halal requirements for products, including cosmetics, pharmaceuticals, medical devices; and addressing US concerns with conformity assessment procedures.
Also to be addressed will be the prevention of non-tariff barriers to US food and agricultural products in the Malaysian market, including by accepting currently agreed certificates issued by US regulatory authorities; streamlining halal and facility registration requirements to facilitate imports of US food and agricultural products; and implementation of regionalisation of the US for animal diseases.
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Malaysia has also committed “To adopt and maintain high levels of environmental protection and to effectively enforce its environmental laws, including by taking measures to address illegal logging, fisheries subsidies, illegal, unreported, and unregulated fishing, illegal wildlife trade, and committed to increasing enforcement against notorious markets for counterfeiting and piracy.”
To protect internationally recognised labour rights, Malaysia has made commitments on preventing forced labour and effectively identifying and addressing labour law violations in sectors with a high-risk of forced labour and child labour, among others.
The two countries have finalised commitments by Malaysia to address barriers impacting digital trade, services, and investment and Malaysia has committed to refrain from imposing digital services taxes that discriminate against US companies or requiring US social media platforms and cloud service providers to pay into Malaysia’s domestic fund; ensure the transfer of data across trusted borders, with appropriate protections, for the conduct of business; support a permanent moratorium on customs duties on electronic transmissions at the World Trade Organization (WTO); and remove broadcasting terrestrial airtime restrictions on US programming.
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The two nations have also finalised commitments to address intellectual property protection and enforcement, customs and trade facilitation, good regulatory practices, and distortionary behaviours of state-owned enterprises, and committed to strengthening economic and national security cooperation and to enhancing supply chain resilience and innovation, addressing duty evasion, and cooperating on investment security and export controls.
Malaysia has committed to refrain from banning, or imposing quotas on, exports to the US of critical minerals or rare earth elements. Malaysia has committed to the expedient development of its critical minerals and rare earths sectors in partnership with US companies, including granting extended operating licences to create certainty for businesses to increase production capacity. Malaysia has also committed to ensure no restrictions are imposed on the sale of rare earth magnets to US companies.
Both the US and Malaysia have undertaken recent commercial deals between including the procurement of 30 aircraft, with an option for an additional 30 more, purchase of semiconductors, aerospace components, and data centre equipment with an estimated value of US$150 billion (RM633.5 billion), purchase of up tofive million tonnes per annum (MTPA) of liquified natural gas estimated at up to US$3.4 billion per year, purchase of coal and telecommunication products and services valued at US$204.10 million, and capital fund investments in the United States of US$70 billion.
The joint statement says that “the US may positively consider the effect that the agreement has on national security, including taking the Agreement into consideration when taking trade action.”
Additionally, the US Department of the Treasury and Bank Negara Malaysia are in discussions to finalise their mutual understanding on currency policy, and in the coming weeks, the US and Malaysia will undertake domestic formalities in advance of the Agreement coming into force.
