The investment, trade and industry ministry (Miti) said it viewed the 24% tariff seriously and would actively engage US authorities in the hope of reaching a solution that upholds free and fair trade.
The ministry nonetheless expressed confidence that the economy would remain resilient, with domestic demand as the main driver of economic growth.
“The national geoeconomic command centre (NGCC) recently approved by the Cabinet will evaluate the impact of this recent US announcement and will consider a comprehensive and multi-pronged strategy to mitigate the effects of these tariffs on our economy and industries.
“The government is engaging the affected industries while exploring support programmes to help businesses adapt. Miti remains committed to open dialogue and collaboration to resolve trade disputes and promote mutual prosperity,” it said in a statement.
The ministry said the NGCC would be chaired by Prime Minister Anwar Ibrahim, who is also the finance minister, with Miti as its secretariat.
It said the purpose of the NGCC was to ensure that the economy remains competitive despite the ongoing volatility.
Miti said it would leverage Malaysia’s trade and investment framework agreement with the US to seek reciprocal trade gains while pursuing a technology safeguards deal with Washington.
This is with the aim of allowing high-tech cooperation between the two nations, particularly in the fields of semiconductors, aerospace, and digital economy.
“Despite the trade deficit in goods, the US enjoys a trade surplus in services with Malaysia, reflecting strong bilateral economic ties that support jobs and economic growth for both nations.
“It must be highlighted that the trade deficit with the US is also due to many US firms that have been operating in Malaysia for decades, on account of Malaysia’s well-established industrial ecosystem, especially in the E&E sector,” Miti said.
To mitigate the impact of the tariff, Malaysia will expand its export markets through existing free trade agreements, with a priority on high-growth regions.
Miti said new partnerships would also be forged within Asean while key industrial policies like the New Industrial Master Plan and National Energy Transition Roadmap would be expedited to enhance the resilience of the Malaysian supply chain.
“Malaysia is facing this challenge from a position of strength and preparedness. The fundamentals of our economy remain robust.
“In the immediate future, while the external environment may be challenging, our diversified markets and products, along with strong demand for our products, will provide us with some buffers.”