KUALA LUMPUR, July 9 — Malaysia still has time to negotiate with the United States before a newly announced 25 per cent tariff takes effect on August 1, said Minister of Investment, Trade, and Industry Datuk Seri Tengku Zafrul Abdul Aziz.

The minister said the while yesterday’s announcement was a surprise, the August 1 implementation meant Malaysia could effectively continue negotiating with the US for a fair solution.

"This gives us time,” Tengku Zafrul said. "The initial 90 days (pause) ended yesterday, so we act in good faith. We want a fair and comprehensive agreement for Malaysia.”

Prior to the announcement yesterday, the US had imposed a 24-per cent tariff on Malaysian goods except those in exempt sectors.

Speaking at a press conference at the MITI headquarters today, Tengku Zafrul noted that many countries face similar trade challenges with the US.

"Today, you’ve seen many countries face similar challenges. That’s why we only see two countries that have concluded some form of agreement with the US, while the rest are still in negotiations,” he added.

He confirmed that high-level discussions are set to continue.

"Negotiations will continue. I’ve contacted our counterpart, the US Trade Representative, Jamieson Greer, and tomorrow we will have a video call with him,” Tengku Zafrul said.

"In fact, the Prime Minister (Datuk Seri Anwar Ibrahim) will be meeting the US Secretary of State, Marco Rubio, tomorrow, and I will be there.”

When clarifying the status of negotiations, Tengku Zafrul stressed that engagement with the US will continue and could be reopened regardless of outcome.

"Of course, in all negotiations and in all meetings and platforms, we continue to reinforce our view that we are in support of the principles of multilateralism and we believe in a rule-based trading system...”

"But at the same time, during the negotiations, it’s important to know that Malaysia continues to be neutral in its approach,” he said.

Explaining further, he said Malaysia had negotiated in good faith, with considerable give-and-take, while standing firm on crucial matters of national interest and sovereignty that he said were "specific red lines.”

"Based on our internal calculations, our market access offer for both industrial and agricultural products covers nearly all of the US’ requests.

"We also had to achieve a high level of consensus on issues such as economic security, purchase of US-made products, and increasing investments in the US to help balance Malaysia-US trade,” he said.

In terms of the specific sectors, Tengku Zafrul said negotiations for industrial products cut across sectors like machinery and equipment, chemical and chemical-based products, medical devices, iron and steel, aluminium, plastics, automotive, and electrical and electronics.

As for agricultural products, he said negotiations centred on fruits (fresh and processed), grains and rice, live poultry and eggs, meats (poultry, beef, pork) and offal, milk and dairy products, and alcohol.

"Malaysia’s negotiating strategy on agricultural products was a pragmatic balance between public health and reciprocity.

"Generally, both parties agreed to streamline various measures, including acceptance of American regulatory certification for specific food products,” Tengku Zafrul said.

On environmental and labour-based issues, Malaysia has agreed to enhance its environmental protection in line with global commitments as well as international labour standards.

As for digital trade, Malaysia is committed to facilitating digitalisation in trade and encouraging secure cross-border data flows to spur economic growth.

"This approach is based on the principle of non-discrimination, while preserving our sovereign right to regulate in the public interest and for security.

"This is in line with the principles of the World Trade Organisation and our existing commitments under Free Trade Agreements,” he said.

Tengku Zafrul also revealed that commercial deals involving Malaysia Airlines’ pledged purchase of Boeing planes, as well as other deals on semiconductors and tech, also formed part of the package.

A few months back, Malaysia Airlines announced the purchase of 30 new Boeing aircraft, with a possible 30 more in the future.

"All these deals will support the US-Malaysia trade balancing.

"So, due to our existing NDA, I will not go into specifics. But I trust all of you get the rough idea of the level of flexibility and give-and-take required in our negotiations.

"The key takeaway is that we stood firm on what we needed to stand firm on.

"For every single commitment negotiated, we asked ourselves: on balance, would it be better to have a lower tariff on certain sectors but open up our market unconditionally to certain products?

"Negotiating is about balance and pragmatism. Ultimately, it is not just about the tariff rate — the devil is always in the details,” he said.

When asked about the reason behind one basis point increase from the previously announced 24 per cent tariff rate, Tengku Zafrul said this was the prerogative of US President Donald Trump.

"You need to ask the USTR. We asked them and even they don’t have an answer for that — it’s up to the President of the United States.

"Like Japan, they are also asking about the 1 per cent increase. But we have to look at the context of negotiations.

"One per cent is not that big. We are still low compared to our neighbouring countries like Thailand and Indonesia. The important thing is it’s not effective until August 1. We will continue with negotiations.

"But whatever it is, we must be ready that there are areas that we cannot compromise — it is our country’s sovereignty,” he said.

On Malaysia’s economic outlook, Tengku Zafrul said this was tentatively unchanged.

"The details will be revealed by the Central Bank, but I think they are also waiting for our negotiations. So let’s wait until after August 1,” he said.