KUALA LUMPUR (July 12): The 25% tariff imposed on Malaysia’s exports to the US came as quite a shock, considering that the government had been saying its negotiations with US trade officials had been progressing well.

Prime Minister Datuk Seri Anwar Ibrahim on July 7 received a letter from the White House informing him of the even higher tariff, from 24% previously, that would be effective from Aug 1. Malaysia is not alone in having a higher tariff slapped on its exports. Japan and South Korea were also handed the same 25% tariff.

Vietnam seems to have had a more favourable negotiation outcome since the US decided to impose only a 20% tariff on its exports — a huge cut from the 46% reciprocal tariff announced in April. Vietnam had offered to drop all tariffs on US imports in its response to the reciprocal tariff announcement.

With less than a month to the Aug 1 deadline, can Malaysia negotiate a lower tariff for itself, just as Vietnam did?

Economists The Edge spoke to are of the view that there may not be a huge downward revision of the 25% rate imposed on Malaysian goods, with 20% being the baseline.

Meanwhile, we have a separate story on the semiconductor industry, where local chip firms are still awaiting clarity on the tariff by the US, hoping that the Trump administration would continue to exempt semiconductors from the 25% tariff beyond Aug 1. Last year, Malaysia shipped US$16.2 billion (RM69.04 billion) worth of chips to the US, making up almost 20% of all US semiconductor imports.

Also, we take a look at the performance of local technology stocks against global giants. While the US semiconductor indices have not only rebounded but are charting new highs, Malaysian tech stocks continue to slide. Most Malaysian stocks with direct and indirect exposure to the semiconductor value chain have delivered negative returns year to date, reflecting broader concerns over the tariff war, intensified geopolitical tension as well as the US chip export restrictions.

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