He said the Malaysia-US Reciprocal Trade Agreement had resulted in tariff reductions from 25% to 19%, with 1,711 tariff lines worth RM22 billion being removed.
“If this deal had not been inked immediately, Malaysia risked having its tariffs raised to 24%, 30%, 40%, 50% or even 100%. This would have adversely affected our competitiveness, investments and jobs,” he said in a ministerial statement at the Dewan Rakyat.
“This would have hurt Malaysia’s export competitiveness. Who would’ve borne the cost? Our companies. Who would lose their jobs and income? Malaysians.”
He said such uncertainty would also have caused foreign investors to lose confidence in the country.
Tengku Zafrul said the trade agreement would enhance Malaysia’s predictability and stability in conducting business — key factors that investors look for before deciding to invest in the country.
He said the deal had become a benchmark for other nations to follow.
“When other countries later refer to the Malaysia-US framework as a benchmark, don’t let anyone (say) Malaysia merely followed others,” he said.
Under the Malaysia-US Reciprocal Trade Agreement, Malaysia has committed to providing significant preferential market access for US industrial goods, including chemicals, machinery and electrical equipment, metals and passenger vehicles, as well as agricultural products such as dairy products, poultry and rice.
The US, meanwhile, will maintain a 19% reciprocal tariff on Malaysian goods, with certain products receiving a 0% tariff under a list of aligned partners.
Malaysia will also refrain from banning or imposing quotas on exports of critical minerals or rare earth elements to the US and will work with American firms “to create certainty for businesses to increase production capacity”.
Tengku Zafrul said that despite facing unilateral tariff pressures from Washington, Malaysia must continue to engage with the US as it remains a key trading partner.
He said the government had held firm on its “red lines” during negotiations, refusing to compromise on matters vital to national pride and sovereignty.
He said Malaysian negotiators stood their ground on issues such as Bumiputera rights, government procurement policies and the full liberalisation of strategic sectors such as energy and telecommunications.
“If anyone claims we sold out the country, I challenge them to show a single clause that crosses these red lines. There isn’t even one,” he said.
Tengku Zafrul added that Malaysia could have secured better trade terms by conceding these safeguards, but doing so would have betrayed national interests.
“If we wanted better terms, it would have been easy — just surrender all the red lines we’ve fought to protect. But even then, there’s no guarantee we’d get lower tariffs,” he said.