Talks have been challenging though discussions have been done “in a very respectful manner,” Tengku Zafrul said in an interview with Bloomberg TV’s Haslinda Amin.
Trump said on Monday that Malaysia could see a 25% levy – “separate from sectoral tariffs” – unless it reaches an agreement with his administration before the deadline.
The nation was initially hit with a 24% rate in April before the US announced a 90-day pause, which moved the level to 10% on goods to facilitate talks.
“Key issues still being negotiated include the agriculture sector and digital economy,” Tengku Zafrul said.
The security of chips being exported to Malaysia was also a topic they have been discussing, and the government is “looking at ways to have stronger enforcement, stronger laws,” he said.
“At the same time, the government has to be realistic in its targets,” he said, noting that the tariff floor will be 10%.
Tengku Zafrul added he is hoping that the US would continue to extend zero levies on some of Malaysia’s key exports, especially semiconductors.
Trump has been weighing further tariffs on select industries, including chips and pharmaceuticals.
The trade minister said he would have a video call with US trade representative Jamieson Greer today to continue negotiations.
Meanwhile, Prime Minister Anwar Ibrahim is also scheduled to meet US secretary of state Marco Rubio today to appeal for a lower levy.
Tengku Zafrul had previously said Malaysia aimed to reduce US tariffs to below 10% for sectors critical to both economies.
The Trump administration meanwhile wanted the country to address trade imbalances, non-tariff barriers and safeguard US technology from being channelled to other parties.
Today, Tengku Zafrul ruled out the possibility that Malaysia was going into a recession, despite the expected hit on the economy from the tariffs.
The central bank said yesterday that it would issue a revised growth forecast in the fourth week of July, after initially projecting a 4.5% to 5.5% expansion this year.
The US ran a goods trade deficit with Malaysia of US$24.8 billion last year, according to data from the office of the US trade representative.
The US was also the biggest foreign investor in Malaysia last year.