Malaysia to monitor US tariff proceedings, stands by reciprocal trade pact

KUALA LUMPUR: Malaysia will closely follow the ongoing US legal proceedings on tariffs and take appropriate action through proper legal channels if the outcome affects the country, said Investment, Trade and Industry Minister Tengku Datuk Seri Zafrul Abdul Aziz.

The minister was referring to the uncertainty surrounding former US President Donald Trump's use of the 1977 International Emergency Economic Powers Act (IEEPA) to impose broad tariffs.

Reuters reported that US Supreme Court justices have questioned whether the act, which empowers the president to regulate imports during national emergencies, provides authority for such tariffs.

Despite the legal developments, Tengku Zafrul reaffirmed Malaysia's commitment to the reciprocal trade agreement signed with the US on October 26.

While legally the country can propose adjustments before ratification, any changes would require mutual consent.

"There are changes that can be justified, but to make any adjustment, it has to be mutual," he said at a press conference on the Ministry of Investment, Trade and Industry's (MITI) report card for the third quarter of 2025

On the possibility of delays due to ongoing US legal proceedings, the minister said Malaysia would respect the legal process and take advice if the outcome affects its interests.

"As the government of Malaysia, if we are committed, we must demonstrate that commitment. Our credibility is at stake.

"Once the federal court reaches a decision, we will follow the legal process. If the ruling has any impact on us, we will seek legal advice on the appropriate way to proceed," he said.

The agreement on reciprocal trade currently covers 1,711 tariff lines.

Tengku Zafrul said semiconductors are not included, as tariffs for the sector remain at zero.

However, he noted that the agreement opens the door for further negotiations on semiconductors and other sectors in the future.

The minister also highlighted that Malaysia's credibility is key in international trade dealings.

"If we are committed as the government of Malaysia, we must show that commitment. Waiting for something beyond our control is not the right attitude," he said.

Trump had previously argued that the tariffs were necessary to address what he described as an economic and national security threat while proposing to channel tariff revenues into US$2,000 payments for lower- and middle-income Americans and to reduce US debt.

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