- Malaysia will spend $150 billion on U.S. equipment and invest $70 billion in the U.S. to ease tariffs and address trade imbalance.
- Minister Tengku Zafrul warned that semiconductor exports may still face U.S. tariffs due to national security concerns.
Malaysia will spend up to $150 billion over the next five years to purchase equipment from U.S. multinationals across its semiconductor, aerospace, and data centre sectors, part of a broader trade agreement aimed at easing tariff tensions with Washington, Trade Minister Tengku Zafrul Aziz said on Monday, August 4.
The announcement follows last week’s decision by the United States to impose a reduced 19% tariff on Malaysian goods from August 8, down from the 25% initially threatened under measures introduced by former President Donald Trump’s administration.
Malaysia’s state energy firm Petroliam Nasional Berhad (Petronas) will also purchase $3.4 billion worth of liquefied natural gas annually. Malaysia also commits to $70 billion in cross-border investment into the U.S. over five years. The investments aim to reduce the U.S. goods trade deficit with Malaysia, which stood at $24.8 billion in 2024.
“We are finalising a joint statement on the commitments made,” Tengku Zafrul told parliament, noting the outcome followed weeks of intensive negotiations. “Despite expecting lower tariff rates, the ministry believes these talks achieved a reasonable outcome given Malaysia’s offers.”
Malaysia will also reduce or eliminate duties on 98.4% of U.S. imports, ease several non-tariff barriers, and remove a controversial requirement for U.S. tech firms, including social media and cloud service providers, to contribute a portion of their Malaysian revenues to a domestic fund.
While Malaysia secured tariff exemptions on its pharmaceutical products and semiconductors exported to the U.S., Tengku Zafrul warned that semiconductor exports could still face future tariffs on national security grounds.
“We must remain prepared for potential additional tariffs on the semiconductor industry under U.S. security-related laws,” he said.
He added that Malaysia also seeks further exemptions for commodities such as cocoa, rubber, and palm oil.