Malaysia, US Discuss Tariff Rate Below 20% Ahead of Final Announcement
Malaysian Prime Minister Anwar Ibrahim confirmed that the United States will announce its tariff decision on Malaysian goods on Friday (Aug 1), following a phone conversation with U.S. President Donald Trump. The two leaders spoke for approximately 20 minutes on Thursday, according to sources familiar with the talks.
Negotiations are ongoing, but sources said both sides are working toward a tariff rate below 20%, a figure lower than the initially threatened 25%, which Malaysia could face if no deal is reached. That potential rate would have been higher than those imposed on other Southeast Asian countries—Indonesia and the Philippines at 19%, and Vietnam at 20%.
Malaysia and the U.S. have held several rounds of discussions, with unresolved issues remaining, particularly around non-tariff barriers, according to Malaysia’s trade minister.
Speaking in parliament, Anwar said the tariff discussions were conducted in the “spirit and principle of free trade.” He added that Trump had agreed to review the proposed tariff rate after their conversation.
“We pray, God willing, that it will help and not burden our country’s economy,” Anwar said while presenting Malaysia’s new five-year economic roadmap.
Trump to Attend Asean Summit in Malaysia
Anwar also announced that President Trump confirmed his attendance at the upcoming ASEAN Summit in Malaysia this October, further signalling strengthened diplomatic ties between the two nations.
Malaysia Unveils Five-Year Economic Plan
During his address, Anwar introduced Malaysia’s 2026–2030 economic plan, targeting:
- GDP growth of 4.5%–5.5% annually
- Budget deficit below 3% of GDP by 2030
- Export growth of 5.8% annually
- Inflation rate between 2%–3%
The government will allocate RM611 billion (S$185 billion) to the plan, with RM430 billion funded directly by the government and the rest sourced from government-linked companies and private sector investment.
“The next five years will be a crucial period for Malaysia to not only transition into a high-income nation but also to provide a high quality of living for the people,” Anwar said.
The announcement follows the central bank’s recent downgrade of its 2025 growth forecast to 4%–4.8%, citing global trade tensions and tariff-related uncertainties. Earlier this month, Bank Negara Malaysia cut interest rates for the first time in five years to help support the country’s export-reliant economy.
