Indirect Tax Alert
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Issue No. 15/2025 | 7 August 2025
Latest Tariff to be effective from 7 August 2025 on Malaysian Exports to U.S.
The U.S. has imposed a 19% tariff on Malaysian exports- down from a previously threatened 25% level. This revision was executed through an Executive Order signed on 31 July 2025.
The adjustment put Malaysia in the same ASEAN tariff category as Indonesia, Thailand, the Philippines, and Cambodia, all subject to 19% except for Singapore with a 10% rate.
Key concessions that Malaysia has committed include purchase of
- Malaysia committed to spend up to US$150 billion over five years on U.S.-made semiconductor, aerospace, and data-centre equipment
- Petronas will buy approximately US$3.4billion per year in U.S. liquefied natural gas
- Malaysia will also invest around US$70 billion in U.S. cross-border investments over five years to help rebalance its nearly US $25billion trade deficit
- Tenaga Nasional Berhad will purchase US$42.6 million coal
- Malaysian Aviation Group will purchase US19 billion Boeing aircraft
Easing of U.S. non-tariff concerns
- Malaysia agreed to ease or eliminate non-tariff barriers on 98.4% of U.S. import lines—including reducing restrictions tied to halal certification, government procurement, and revenue-sharing mandates on tech platforms. (Malaysia maintains zero or low tariffs for many industrial goods. So, the focus was on removing red tape)
- Certain red-line policies remained intact, preserving Malaysia’s sovereign interests in areas like fiscal
Pharmaceutical has been given sector-specific exemption for the time being but still subject to review in the future. As of Wednesday , 7 August the US president has said that US will charge a tariff of 100% on semiconductor imports from countries not producing in America or planning to do so. No effective date for enforcement of this tariff was given.
Considering these developments, staying abreast of the latest tariff updates and ensuring compliance is critical. Malaysian companies must diligently classify and value their goods to avoid breaches under the Fraud Claims Act, with non-compliance leading to hefty penalties. Proactively engaging in binding tariff classification, use of bonded facilities, duty drawback, product valuation strategy, product origin shift can help mitigate additional costs at US entry points.
Conclusion
The time to wait and see is over. August 7 is here; the tariff threat has been concluded. It is crucial for Malaysian trade stakeholders to adapt swiftly and strategically. Thorough understanding and proactive management of these tariffs can help mitigate their adverse effects, ensuring resilience and sustained growth amidst evolving global trade dynamics.
If you would like to have more detailed insights and bespoke advice for your business, please do not hesitate to contact us and we would be happy to assist you.
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