based on materials from the site - By Cryptopolitan_News
Malaysia plans to invest up to $150 billion over the next five years in American equipment.
A few days after Malaysia reportedly reached a trade agreement with the United States that lowers the proposed 25% tariffs on its exports to 19%, Malaysia announced its intention to invest over $150 billion in procurement and investments.
This amount is believed to be sufficient to eliminate the trade imbalance with the U.S., as the trade deficit in goods between the two countries is expected to reach $24.8 billion in 2024.
Malaysia is committing to trade with the United States.
Under the agreement, Malaysia is expected to spend up to $150 billion over the next five years to procure equipment from American multinational corporations for its semiconductor, aerospace, and data center sectors.
As part of the deal, the state energy company Petroliam Nasional Berhad will purchase liquefied natural gas worth $3.4 billion a year, while the government commits to invest $70 billion in cross-border investments in the U.S. over the next five years to eliminate the trade imbalance, said Minister Tengku Zafrul Aziz.
In addition to the promised investments, Malaysia also agreed to reduce or eliminate tariffs on 98.4% of imports from the U.S., ease some non-tariff barriers, and cancel the requirement for American social media platforms and cloud service providers to contribute a portion of their revenue in Malaysia to a state fund.
According to Tengku Zafrul, both countries are in the process of preparing a joint statement covering the commitments made after several weeks of tariff negotiations.
The Malaysian government hoped for a reduction in tariff rates, but it is satisfied with what it has received.
"The ministry believes that these negotiations have been successful and reached an acceptable outcome, considering Malaysia's proposals," Tengku Zafrul said.
Last week, Tengku Zafrul announced that Malaysia secured tariff exemptions on pharmaceuticals and semiconductors exported to the U.S., and expressed hope for further reductions on goods such as cocoa, rubber, and palm oil.
However, on Monday he urged caution and preparation, as semiconductor chips may still be subject to additional tariffs under U.S. legislation for national security reasons.
Malaysia has achieved a reduction in tariffs.
Last week, the United States announced plans to impose a 19% tariff on Malaysia starting August 8, lower than the 25% announced in July.
This statement was made following negotiations between Prime Minister Anwar Ibrahim and President Trump on July 31. The agreement, reportedly reached over the phone, was preceded by a series of issues beyond traditional trade negotiations. However, these issues were not disclosed.
According to official sources quoted by The Straits Times, "the call was made early in the morning on July 31, after the Americans proposed it just a few hours earlier," proving that it was done at the last minute.
Commentators believe that a potential factor influencing the negotiations could be the U.S. concern over China’s dominance in the market. Sources suggest that Malaysia is capable of replacing China as a supplier of rare earth elements to the U.S., given the country's massive reserves exceeding 16 million tons.
This would effectively alleviate America's concerns about its dependence on China in a world where China continues to dominate the production of critical minerals. Currently, rare earth ore mined in Malaysia is transported to China, as the country lacks its own processing technologies.
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