KUALA LUMPUR, July 22 — Malaysia is trying to lower looming US tariffs to 20 per cent but has pushed back against American demands that officials say touch on core domestic policies.

Citing sources, Bloomberg reported that talks with the Trump administration have advanced on issues like AI chip transshipment, but Malaysia is unwilling to extend special EV tax treatment for American firms.

The government argues that continuing such exemptions past December would force it to give similar treatment to other countries.

Officials also rejected calls to reduce foreign ownership limits in finance and energy, citing political sensitivity and the need for broad stakeholder engagement.

A US demand to reduce fishing subsidies has also sparked concern, as it could alienate a key voter base in rural Malay communities.

Prime Minister Datuk Seri Anwar Ibrahim said on Monday that Malaysia will not compromise on national policies, including those related to ethnic affirmative action.

Minister of Investment, Trade, and Industry Datuk Seri Tengku Zafrul Abudl Aziz has stressed that any deal must be fair and not sacrifice Malaysia’s long-term economic sovereignty.

The US has not publicly confirmed its full list of demands, but officials say negotiations are ongoing amid growing pressure on trade partners in the region.

Vietnam recently voiced frustration after a supposed deal for lower tariffs turned out to include a 20 per cent rate, suggesting talks with the US remain unpredictable.

The stakes are high for Malaysia in the talks, as the country must preserve both economic growth and domestic political stability.

On July 8, US President Donald Trump unexpectedly announced a 25 per cent tariff on all Malaysian products entering the United States, effective August 1, up from the 24 per cent imposed during the 90-day “pause” from his “Liberation Day” salvo in April.