The mystery surrounding the tariffs that will be imposed on Malaysia was finally answered when President Donald Trump yesterday announced the imposition of a 25% tax on all Malaysian products entering the United States (US) market, effective August 1, 2025.
The rate was an increase compared to the initial announcement last April which set a tariff of 24%, thus triggering various reactions despite the fact that negotiations between the two countries were previously reported to be going smoothly.
Through the Truth Social platform, Trump uploaded the essence of an official letter that will be sent to the Yang di-Pertuan Agong, Sultan Ibrahim, thus marking a significant deterioration in bilateral trade relations between Washington and Putrajaya.
In the letter dated July 7, he described Malaysia's tariff, non-tariff policies and various trade barriers as the main causes of the trade imbalance which he said "threatens the US economy and national security".
Trade relations between the two countries have also been described as non-reciprocal for a long time.
Trump also warned that products sent through third countries to avoid the tax would still be subject to the highest relevant rate.
Despite his firm stance, he still opened the door to negotiations by suggesting that Malaysian companies build factories or manufacture products directly in the US while promoting the US economy as the "number one market in the world" and promising a fast and business-friendly investment approval process.
A warning was also issued to Malaysia not to retaliate against the tariff increase or the US would retaliate with an equivalent additional rate.
Previously, negotiations on the tariff issue were held in May and were led by the Minister of Investment, Trade and Industry, Datuk Seri Tengku Zafrul Abdul Aziz, which he described as taking place in a good and constructive atmosphere.
