Federation of Malaysian Manufacturing (FMM) president Soh Thian Lai said that without the agreement, Malaysia would have been directly exposed to aggressive US tariff actions rolled out in recent months.

He noted that the US had proposed 100% tariffs on semiconductor imports from firms that do not move production to America, 50% tariffs on kitchen cabinets and bathroom products, and 30% tariffs on upholstered furniture.

He said the agreement protects Malaysian exporters from being caught in these sweeping actions, and ensures continued access to the US market under stable and predictable conditions.

“We recognise that these discussions were exceedingly challenging and required careful balancing of Malaysia’s interests and evolving global trade pressures,” he said in a statement.

Malaysia and the US signed a wide-ranging reciprocal trade deal yesterday aimed at strengthening bilateral economic ties, expanding market access, and bolstering supply chain resilience.

Soh noted that under the agreement, the US will maintain a 19% tariff on Malaysia-originating goods, with exemptions applied to 1,711 tariff lines of Malaysian exports.

“These exemptions cover key sectors such as palm oil, rubber products, cocoa, aircraft components, and pharmaceutical related items, collectively valued at about US$5.2 billion (RM21.9 billion) or approximately 12% of Malaysia’s exports to the US,” he said.

He said the agreement’s phased implementation will allow for adjustments to happen smoothly over several years, including changes to excise duties, sales and service tax, and technical and pharmaceutical standards.

He said the trade deal “provides clarity and stability for investors” and encourages collaboration with US firms in high-value and digital sectors.

“The bottom line is that the agreement gives Malaysia’s manufacturing sector breathing space, continuity of market access, and a stronger foundation for investment,” he said.