The agreement was signed by Prime Minister Anwar Ibrahim and US president Donald Trump during a bilateral meeting on the sidelines of the 47th Asean Summit.
In a joint statement released by the White House, both governments said the deal “will provide both countries’ exporters unprecedented access to each other’s markets” and “build upon our long-standing economic relationship”, including the 2004 Trade and Investment Framework Agreement.
Under the agreement, Malaysia has committed to “provide significant preferential market access for US industrial goods exports, including chemicals, machinery and electrical equipment, metals, and passenger vehicles,” as well as for agricultural exports such as dairy, poultry, and rice.
The US, meanwhile, will maintain a 19% reciprocal tariff on Malaysian goods, with certain products receiving a 0% tariff rate under a list of aligned partners.
The statement also said Malaysia will “refrain from banning, or imposing quotas on, exports to the US of critical minerals or rare earth elements” and will partner with American firms “to create certainty for businesses to increase production capacity”.
On digital trade, Malaysia agreed to “refrain from imposing digital services taxes that discriminate against US companies” and to “ensure the transfer of data across trusted borders, with appropriate protections”.
Both countries also pledged to “adopt and maintain high levels of environmental protection”, enhance labour rights enforcement, and strengthen cooperation on investment security, export controls, and anti-counterfeiting efforts.
The statement said Malaysia and the US “have committed to strengthening economic and national security cooperation and to enhancing supply chain resilience and innovation”.
It said Bank Negara Malaysia and the US Treasury “are in discussion to finalise their mutual understanding on currency policy”.
“In the coming weeks, the US and Malaysia will undertake domestic formalities in advance of the agreement entering into force,” the statement said.