Tengku Zafrul said the US had asked Malaysia to consider liberalising the foreign shareholding restrictions in force on some sectors. Many other nations have also received the same request from the US, he said.
The minister said the government would need to consult industry leaders in strategic sectors to determine whether these sectors were ready for the caps on foreign equity to be lifted.
“We need to carefully study its potential impact,” he said.
Tengku Zafrul pointed out that some sectors did not have such restrictions, while the manufacturing industry was “nearly all open”. However, foreign equity limits are still being imposed on strategic sectors, he said.
“As you know, Malaysia has equity restrictions for foreign shareholders in certain sectors. There’s a request for us to relook or liberalise those sectors. We need to consult those industries, on whether we are ready to relax those equity shareholding restrictions,” he said.
However, not all the US requests would be accepted, he said. “Some of the requests, we feel, may not be fair to Malaysia.”
He said trade officials were working to meet US president Donald Trump’s new tariff deadline of Aug 1, “but not at the expense of agreeing to every request”. The Trump administration has said a 25% tariff would be imposed should talks on a trade deal fail.
Flexibility on tariffs
Tengku Zafrul said there might be room for flexibility on a sector-by-sector basis. “There will be opportunities for us to negotiate tariffs below 10% for certain sectors. But at the same time, we cannot depend solely on this trade negotiation.”
He pointed to the current status of key sectors such as semiconductors and pharmaceuticals, on which no tariffs are imposed.
“For example, pharmaceuticals are in a better position. Right now, tariffs for both the semiconductor and pharmaceutical sectors are at zero. Naturally, we want to maintain that 0% tariff, but whether we can secure it is another matter.”
On the potential impact of tariff changes on the Johor-Singapore special economic zone, Tengku Zafrul said investors were holding off until there was greater clarity.
“There seems to be a wait-and-see attitude. Investors are watching how the tariff scenario plays out before recalculating their positions. That calculation can only happen once there’s certainty.”
Another discussion would be held this week, with talks to be accelerated until the end of the month, he said.