Malaysia vows not to cross "red lines" in U.S. tariff talks
Malaysia will not compromise its national interests in ongoing trade talks with the United States, Trade and Industry Minister Tengku Zafrul Aziz said on Wednesday, as both nations continue negotiations over a 25% tariff imposed on Malaysian exports.
Speaking to reporters in Kuala Lumpur, Tengku Zafrul stressed that certain “red lines” would not be crossed, even as the August 1 deadline for the tariff's implementation approaches, News.Az reports, citing Reuters.
While he declined to detail what those limits were, citing non-disclosure agreements, he confirmed that the U.S. had made requests touching on sensitive domestic issues.
“The demands involve Malaysia’s policies on digital taxes, e-commerce regulations, medical standards, halal certification, and government procurement,” Zafrul explained. “We don’t want to reach a deal just for the sake of reaching a deal. If the deal does not benefit Malaysia, we should not have a deal.”
The 25% tariff, up from an initial 24%, affects Malaysian exports to the U.S.—a crucial market for the Southeast Asian nation, especially in semiconductors and electronic goods. The U.S. is Malaysia’s second-largest trading partner after China.
Speaking earlier at the Reuters NEXT Asia summit in Singapore, Zafrul said Malaysia has no plans for retaliation and remains “optimistic” about securing an agreement before the deadline.
Asked about the increased tariff rate, Zafrul said he was unsure of the reason behind the change but reiterated Malaysia’s commitment to fair trade, emphasizing the country’s efforts to improve labor and environmental standards, promote digitalization, and enable secure cross-border data flows.
Malaysia’s negotiating team has met with U.S. counterparts at least 25 times so far, he said, expressing more than a 50% chance of reaching a deal by the deadline. “The timeline is key,” he noted.
In a strategic move to strengthen economic ties, Malaysia has also proposed purchasing 30 Boeing aircraft for Malaysia Airlines, alongside new deals in semiconductors and tech sectors.
Despite the tariff tensions, U.S. markets ended largely unchanged on Tuesday, with the Dow slipping by about a third of a percent, while the S&P 500 and NASDAQ held flat.
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