Malaysia could have faced significantly higher tariffs on exports to the United States if it had failed to engage with Washington on trade issues, Investment, Trade and Industry Minister Datuk Seri Johari Abdul Ghani told Parliament.
Speaking during the Dewan Rakyat sitting, Johari said continued negotiations and engagement with the US remain crucial to protecting Malaysia’s trade competitiveness and safeguarding key export sectors.
He warned that without active discussions, Malaysia risked having US tariff measures imposed unilaterally, making Malaysian products less competitive in one of the country’s most important export markets.
“When we export goods, we already agree on the selling price with US importers. However, when those products arrive in the United States, an additional tariff can be imposed, increasing costs for consumers and affecting the competitiveness of our products,” he said.
Johari explained that although the additional tariffs are technically paid by importers and consumers in the US, the indirect impact falls on Malaysian exporters as higher prices could reduce demand for their products.
He stressed that Malaysia cannot simply ignore such measures and must continue engaging with American authorities to protect local industries and maintain market access.
The minister was responding to a supplementary question from Datuk Seri Hamzah Zainuddin (PN-Larut) during the oral question-and-answer session.
Johari noted that the government recognises the importance of trade relations with the US, particularly for the country’s electrical and electronics (E&E) and semiconductor industries, which remain among Malaysia’s largest export contributors.
According to him, Malaysia recorded approximately RM1.6 trillion in total exports, with RM711 billion coming from the E&E and semiconductor sectors alone.
Of that amount, exports to the United States account for approximately RM233 billion annually, underscoring the importance of maintaining strong trade ties with Washington.
The minister acknowledged that he had initially been sceptical about the need for certain trade agreements but said developments in global trade had demonstrated the importance of maintaining engagement.
He pointed to the example of China, which was hit with tariffs as high as 145 per cent during trade disputes with the United States.
“If Malaysia had been subjected to tariffs of 40 per cent or more at that time, the impact on our companies would have been severe,” he said.
Johari added that the current 10 per cent tariff imposed under Section 122 of the US Trade Act 1974 is temporary and is scheduled to expire on July 24 after reaching its 150-day validity period.
The government, he said, will continue monitoring developments and pursuing dialogue to ensure Malaysian exports remain competitive in global markets.
With exports playing a vital role in the country’s economy, authorities view sustained engagement with major trading partners as essential to protecting jobs, investments and future economic growth.
