KUALA LUMPUR – US president Donald Trump has imposed a 25% tariff on Malaysian exports effective August 1, escalating his push for what he calls “reciprocal” trade relationships.
The rate is a slight increase from the 24% tariff first announced on April 2, which was then paused for 90 days to allow for negotiations. The new tariff is now set to take effect on August 1.
The rates will apply across the board, independently of existing sector-specific duties such as 25% on automobiles and 50% on steel and aluminium.
Malaysia’s revised rate is among several marginal adjustments from Trump’s April tariff announcement, which covered 49 countries. Others included Indonesia (32%), Thailand (36%), and Laos and Myanmar (40%). Cambodia saw a reduction from 49% to 36%. Singapore, India and Taiwan were not mentioned.
In a letter to Prime Minister Datuk Seri Anwar Ibrahim posted on the Truth Social platform, Trump said Malaysia’s trade policies remained “far from reciprocal” and contributed to what he called an “unsustainable trade deficit”. He warned of further penalties if Malaysia retaliates or attempts to reroute goods to avoid the duties.
Trump said he would consider reducing the 25% rate if Malaysia adjusted its trade approach, adding that Malaysian companies manufacturing in the US would not be subject to the new tariff.
“As you are aware, there will be no tariff if Malaysia, or companies within your country, decide to build or manufacture products within the US.
“We will do everything possible to get approvals quickly, professionally, and routinely – in a matter of weeks,” he said.
The April tariffs were announced as part of a sweeping executive order to rebalance global trade, citing a lack of reciprocity, tariff and non-tariff barriers, and economic policies that Trump claimed suppressed US wages and consumption.
The April 2 executive order set varying tariff rates across 49 countries, with Malaysia initially assigned a 24% rate. China faced a 34% tariff, while others were hit with even steeper duties — Cambodia (49%), Laos (48%), Vietnam (46%), Myanmar (45%), and Thailand (37%). Brunei shared Malaysia’s 24% rate, and the Philippines was set at 18%.
Initially scheduled to take effect April 9, the measures were abruptly paused on April 10 for 90 days due to market turbulence, with Trump stating “you have to be flexible.”
Malaysia held two rounds of talks in Washington DC between June 18 and 20, led by Investment, Trade and Industry Minister Datuk Seri Tengku Zafrul Abdul Aziz. He met with the US trade representative and the secretary of commerce in an attempt to finalise a deal.
“They agreed to intensify efforts to reach an agreement acceptable to key stakeholders from both countries,” Zafrul said on June 22, adding that the discussions also focused on strengthening bilateral investment and securing Malaysia’s supply chains.
Trump’s letter to Malaysia mirrors those sent to Japan, South Korea, Indonesia, Thailand and others, as part of a broader strategy to pressure countries into renegotiating trade terms. The US has so far only secured revised agreements with the UK and Vietnam.
Putrajaya has yet to issue an official response. – July 8, 2025