Malaysia Seeks 20% US Tariffs While Resisting EV, Ownership Demands

Malaysia is negotiating with the Trump administration to reduce looming U.S. tariffs on its exports from 25% to around 20%, aiming to align with rates given to regional neighbors like Indonesia and Vietnam. However, Malaysia is resisting several U.S. demands, including extending special tax exemptions for American electric vehicles, easing foreign ownership limits in key sectors such as finance and energy, and reducing fishing subsidies, which are politically sensitive domestically. Prime Minister Anwar Ibrahim has emphasized that Malaysia will not compromise on core national policies, including affirmative action for ethnic Malays and indigenous peoples. Investment Minister Tengku Zafrul Abdul Aziz has warned that any trade deal must be fair and protect Malaysia's long-term economic sovereignty, cautioning against agreements that could jeopardize the nation's economic future. Trade between the U.S. and Malaysia was valued at $80.2 billion in 2024, with the U.S. running a $24.8 billion trade deficit. Negotiations remain ongoing amid growing pressure from the U.S. on its trade partners, with Malaysia balancing the need to preserve economic growth and political stability.