Malaysia will not agree to a trade deal with the United States if it does not benefit the country, said Investment, Trade and Industry Minister Tengku Datuk Seri Zafrul Abdul Aziz.
“If the deal does not benefit Malaysia, we should not have a deal. We have to be firm on that,” he said. “If we can reach a deal that on balance benefits Malaysia, Malaysian companies, and Malaysians, then yes.”
He noted that while not all matters are non-negotiable, some key issues remain off limits.
On halal certification, he said Malaysia is open to engaging with US exporters, but only if they meet domestic standards.
“They want to export their agricultural products. For example, we currently don’t allow the import of US beef and poultry. They’re asking why. But it’s not a red line for us – we can allow it, as long as their products meet our standards.”
However, legal and policy sovereignty are non-negotiable.
“We discussed our right to impose a digital tax. That is one of our red lines, and we view it as our sovereign right,” he said.
Other red lines include recently passed legislation on digital commerce, government procurement, and standards involving health and technical regulations.
Tengku Zafrul said Malaysia must become more competitive and innovative in response to the US-imposed 25% tariff on certain goods.
The government is focusing on strengthening the domestic business ecosystem, diversifying trade links, and boosting export capabilities.
“Malaysia has to continue to focus on improving the strength of our companies and the fundamentals of our economy. That is what’s going to drive Malaysia,” he said. Key strategies include the National Industrial Master Plan (NIMP), the National Energy Transition Roadmap (NETR), and the upcoming National Semiconductor Strategy.
He confirmed that Malaysia is preparing mitigation measures to address global trade shifts.
“We need to be more competitive and innovative. We need to ensure that we move up the value chain to sustain our growth.”
Malaysia’s trade-to-GDP ratio was 150% last year, with the US accounting for around 15% of total trade – equivalent to RM200 billion in exports.
Despite global uncertainties, the official GDP growth forecast remains unchanged at between 4.5% and 5.5%.
Tengku Zafrul stressed that Malaysia is taking a cautious, measured approach to the ongoing tariff talks, considering broader economic implications and its existing trade obligations.
“Looking at our country’s economy and our policies, we have achieved the kind of growth that we have today because of the balance in supporting key industries.
“Whatever we give to the United States, we need to give to the rest. We have Free Trade Agreements (FTAs). So we have to be fair to all the countries, not just the one country that does 15% of our total trade. There’s another 85%.”
He noted that Malaysia’s applied tariff rate on US imports is already at 5.6%.
“How low can we go?” he added.
He acknowledged business concerns, saying many companies are rushing exports and increasing inventory in anticipation of potential changes.
“We will continue (the negotiations) where we stopped. We were actually in the midst of asking for an extension. That’s the truth,” he said.
“When you negotiate, the devil is in the details. So that is where sometimes time is required.”