The United States (US) will impose a 25% tariff on all Malaysian exports beginning 1 August 2025, as formally communicated in a letter from US President Donald Trump to Prime Minister Datuk Seri Anwar Ibrahim. The letter, dated 7 July and shared publicly via Trump’s Truth Social account, cited a “significant trade deficit” with Malaysia as the reason behind the move.
Trump acknowledged the strong trade ties between both countries but said the tariff is needed to create a more “balanced and reciprocal” relationship. He pointed to Malaysia’s “tariff, non-tariff policies and trade barriers” as contributors to the current imbalance, adding that the measure directly responds to the ongoing trade deficit.
The letter added that goods transshipped through Malaysia to avoid US tariffs will also be subject to the 25% rate. However, Malaysian businesses can avoid the tariff by relocating manufacturing to the US, where Trump said approvals would be fast-tracked to support such investments.
He also warned that any increase in Malaysian tariffs would be matched by a corresponding increase on the US side. While the letter maintained a firm stance, it closed on a cooperative note, stating that the tariff may be adjusted over time and expressing hope for continued trade between both nations.
In response, Malaysia’s Ministry of Investment, Trade and Industry (MITI) said it will continue discussions with US counterparts to clarify the scope and impact of the new tariff and work towards a mutually beneficial agreement. The ministry reaffirmed the country’s commitment to resolving trade concerns through constructive dialogue and warned that unilateral actions could disrupt business operations, supply chains, and investments that benefit both sides.
“Malaysia strongly believes that together, we can find mutually acceptable solutions that safeguard the interests of both our countries and peoples,” MITI said.
The US remains Malaysia’s second-largest trading partner and top export destination. According to the ministry, total bilateral trade grew nearly 30% to RM324.9 billion in 2024, with Malaysian exports totalling RM198.7 billion and imports from the US reaching RM126.3 billion.
