Malaysia remains committed to its ambitious trade growth target by 2025, despite escalating trade tensions with the United States over impending tariff hikes.

Tengku Zafrul Aziz, Malaysia’s Minister of Investment, Trade and Industry, stated that despite global uncertainty and rising geopolitical pressure, the country still anticipates trade growth of 4–5% in 2025.

📦 Exporters Adapt as Pre-Tariff Shipping Rush Intensifies

Zafrul emphasized that Malaysian exporters are responding swiftly, with many accelerating shipments ahead of the August 1 deadline, when new U.S. import tariffs are expected to take effect. This preemptive action is likely to continue through the coming weeks.

This response signals Malaysia’s resolve to remain a competitive and trusted trade partner, even as it navigates turbulent conditions.

📉 May Export Decline Signals Challenging Months Ahead

Despite the optimistic tone, official data revealed a drop in exports for May 2025, marking the first decline since September 2024. The downturn raises concerns over Malaysia’s exposure to protectionist U.S. policies, especially as the U.S. remains one of its key trade allies.

The White House announced in early May plans to impose a 25% tariff on a broad range of goods, including semiconductors, electronic components, crude palm oil, and other major Malaysian exports. The initial rate was 24%, but was quietly raised shortly thereafter, adding to the pressure.

Zafrul noted that his ministry is monitoring the situation closely and is ready to deploy both short- and long-term strategies to support exporters if tariffs are enacted.

⏳ Exporters Race Against the Clock

Many companies are now rushing to ship goods before August 1 to avoid the looming tariffs. While this may temporarily boost trade figures, analysts caution that such front-loading could lead to a drop in export volumes in the months following, as demand and shipment volumes normalize.

Economic Sovereignty Under Pressure

With the tariff deadline fast approaching, Malaysia is also engaging in diplomatic talks aimed at easing or avoiding the most damaging duties. The U.S. is pressuring Malaysia to lift restrictions on foreign ownership across various industries as part of any potential trade agreement.

According to Zafrul, Washington is pushing for extensive liberalization in strategic sectors such as:

🔹 logistics

🔹 telecommunications

🔹 retail

🔹 oil and gas

Malaysia, however, maintains that these sectors are protected under national sovereignty. While not opposed to liberalization, Zafrul stressed that any reforms must be strategic, inclusive, and aligned with Malaysia’s long-term industrial goals.

“We are not negotiating just for the sake of negotiation,” he said. “Any changes must reflect our national aspirations and maintain societal harmony.”



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