The United States (US) has reduced import tariffs on Malaysia to 19%, effective August 7, after a phone conversation between President Donald Trump and Prime Minister Datuk Seri Anwar Ibrahim.
Executive Order 14257, signed by Trump on July 31, revised the US Reciprocal Tariff framework, citing trade imbalances and national security interests, which have now put Malaysia on par with Indonesia, the Philippines, Thailand and Cambodia, while Vietnam is subject to a 20% tariff.
According to a report by The Straits Times, Malaysia agreed to make several important concessions in the negotiations, including opening the way for US halal certification for pharmaceutical products, as well as supplying rare earth elements to Washington.
Government sources revealed that Malaysia's move was well received by the White House as the rare earth materials are critical components in the US high-tech industry.
Meanwhile, Singapore was spared any tariff revisions, keeping its tariffs at 10%, while Brunei was hit with a 25% rate, and Laos and Myanmar each had 40%, the highest rates seen as a signal of Washington's firmness towards less cooperative countries.
The tariff move was announced ahead of an August 1 deadline, when Trump is reportedly busy finalizing bilateral negotiations with more than 30 countries before the new rates go into effect.
Countries such as South Korea, Japan, the European Union (EU) and Vietnam were among those who managed to reach last-minute deals.
However, economists have warned that the move could spark inflation and global trade uncertainty, as a US appeals court is also examining the validity of Trump's authority to impose broad tariffs under economic emergency provisions.
