Malaysia is the world’s sixth-largest semiconductor exporter, and Tengku Zafrul today said the tariff would have “serious implications” for major exporting countries like Malaysia.
“As of now, Malaysian semiconductor exports to the US remain exempt from these retaliatory tariffs,” he told the Dewan Rakyat.
“However, this exemption is subject to review and could change at any time depending on the US administration’s policy direction.
Bagan MP Lim Guan Eng earlier asked Tengku Zafrul to clarify what concessions Malaysia had made in exchange for the 19% US tariff, as well as its impact on the economy and cost of living.
He also inquired about the government’s plans to cushion potential price increases and expressed concern over Trump’s proposal to impose a 100% tariff on imported semiconductors unless companies invest in the US. Lim also asked whether Malaysia’s current exemptions could be at risk.
In an event at a hotel here earlier today, Tengku Zafrul said his ministry is working closely with Bank Negara Malaysia to assess the full impact of the tariff and its effect on various supply chains.
He also said about 65% of Malaysia’s semiconductor exports to the US come from American companies operating in Malaysia.
Malaysia is the world’s sixth-largest semiconductor exporter, with electrical and electronics (E&E) exports surpassing RM600 billion last year.
On Monday, Tengku Zafrul told the Dewan Rakyat that semiconductor products were exempted from the 19% tariff imposed on goods from Malaysia.
However, he said the US government was investigating whether extensive reliance on foreign imports of pharmaceuticals and semiconductors poses a national security threat.
He noted today that 60% of Malaysia’s exports to the US are in the E&E sector, and within that, 68% are semiconductors. Of that 68%, 65% are exported by American companies operating in Malaysia.
Tengku Zafrul also called for more clarity on the tariffs after noting that the US government has yet to officially announce the mechanism for implementing them.
He added that Putrajaya is actively engaging with American companies operating in Malaysia, especially under the American Malaysian Chamber of Commerce, to understand the implications of Trump’s latest announcement.
Yesterday, Trump said the 100% tariff on semiconductor imports would not apply to companies that were already producing semiconductor chips in the US or had plans to do so.
“American firms such as Intel and Texas Instruments have major operations in Malaysia and supply chains involving thousands of local SMEs, and around 7,000 local suppliers supporting 70,000 workers,” he said.
“These firms also have factories in the US, but we are seeking clarification from US authorities about whether ‘investing in the US’ means new investments … or whether existing facilities count.
“We need clearer answers to protect our supply chain ecosystem and to avoid disruptions.”