6% down, RM1 trillion floating – that is the price Malaysia has to pay behind the reduction in United States (US) import tariffs that was heralded as a major success of the government.
However, behind the announcement, there is a huge commitment that invites heated questions when the government led by Datuk Seri Anwar Ibrahim agreed to invest and buy US goods worth more than RM1 trillion, following tariff negotiations that were considered biased against Malaysia.
Although the reduction in import tariffs from 25% to 19% continues to be promoted as a good achievement, in reality it is considered too small compared to the value of the commitment that the country needs to 'make'.
Former Prime Minister, Tun Dr Mahathir Mohamad, described the move as "not a good deal", while other economists stressed that the actual previous tariff was only around 2 to 3%, meaning that the new rate is actually an increase.
Analysts have also questioned the rationale for the purchase of Boeing aircraft, technology, and infrastructure cooperation involving state-owned giants such as Petronas and Tenaga Nasional Berhad, as well as the decision to eliminate import duties on 11,000 US products.
Economist Carmelo Ferlito estimates that Malaysia's total commitment to the US is 13 times the country's trade surplus with the US last year, making it "of no direct benefit" to the economy.
Meanwhile, former minister Datuk Zaid Ibrahim described Malaysia as "too easy to panic" under pressure from President Donald Trump, when the tariff savings it has gained are only around RM10.4 billion over four years, which is like "paying RM24 to save RM1".
