Malaysia's August Trade Growth Slows 1.9% Amid US Tariff Impact

Malaysia's trade surplus expanded to RM16.1 billion in August 2025, driven by a sharper contraction in imports compared to exports, which grew modestly by 1.9% year-on-year. Exports were supported by strong shipments of electrical and electronics (E&E), palm oil, and liquefied natural gas, although growth was dampened by a decline in petroleum products and a significant fall in exports to the United States due to higher tariffs. Imports fell broadly, with notable decreases in intermediate and consumption goods, reflecting weaker domestic demand. Despite the slower export growth and trade disruptions caused by U.S. tariffs, Malaysia recorded its highest cumulative trade values for the January-August period in 2025, with exports surpassing RM1 trillion earlier than the previous year. The Ministry of Investment, Trade, and Industry encouraged exporters to diversify their products and strengthen supply chain efficiencies to navigate global trade uncertainties and leverage Malaysia's 18 free trade agreements. Analysts remain cautious about the export outlook due to ongoing risks from U.S. semiconductor tariffs and sector-specific trade measures, although exemptions for U.S. firms operating in Malaysia may mitigate some impacts.