Malaysia, US Expected Finalize Zero-Tariff Deal on Key Commodity, Automotive, Aerospace Exports

Malaysia and the United States are in advanced negotiations to finalize a reciprocal trade agreement expected next month, which includes the US considering zero tariff exemptions on Malaysian commodities like palm oil and cocoa that are not produced domestically. Malaysia has also requested zero tariffs on furniture, automotive parts, and aerospace components, with the US showing openness to these proposals during multiple negotiation sessions. These discussions are strategically timed ahead of President Donald Trump's planned visit to Kuala Lumpur for the ASEAN Summit in October, aiming to showcase enhanced bilateral trade cooperation. However, the agreement excludes sectors such as semiconductors and pharmaceuticals due to US national security tariffs under Section 232 of the Trade Expansion Act. US trade representatives emphasize that while negotiations are ongoing, the possibility of additional tariffs on ASEAN nations remains if favorable outcomes are not achieved. Economists highlight the importance of concluding the deal promptly to avoid tariff increases and strengthen Malaysia's international trade position.