KUALA LUMPUR, March 15 — The Agreement on Reciprocal Trade (ART) between Malaysia and the US is no longer valid, Investment, Trade and Industry Minister Datuk Seri Johari Abdul Ghani confirmed.
The minister explained that the trade arrangement became inapplicable following a US Supreme Court ruling in February that struck down broad tariff measures introduced under former President Donald Trump, the New Straits Times reported.
“It is not on hold. It is no longer there, it’s null and void,” Johari said.
“The United States Supreme Court has ruled that if you want to impose tariffs, you must have reasons. They cannot impose tariffs on a blanket basis.”
Speaking to reporters after an event in his constituency, Johari said the US is now shifting its trade enforcement strategy. Washington is relying on other tools, such as a temporary 10 per cent tariff under Section 122 of the Trade Act, which could be followed by a review under the more stringent Section 301.
This review, he said, would examine whether foreign acts, policies, or practices are “unreasonable or discriminatory” and burden US commerce.
Among the issues likely to be scrutinised are dumping linked to excess industrial capacity; alleged abuses in manufacturing, such as the use of illegal, underage, or forced labour; environmental violations; and export subsidies that could distort competition.
Johari warned that Malaysian companies found non-compliant could face restrictions on their exports to the US, while the country as a whole could be subjected to higher tariffs if it is deemed to have failed to address such practices.
The stakes are high, as Malaysia’s exports to the US amounted to approximately RM233 billion in 2025.
Key sectors that could be affected include electrical and electronics (E&E), oil and gas, plantation commodities like palm oil, and rubber-based products such as gloves.
Johari said, however, that the US investigations are not confined to Malaysia but extend to about 60 other trading nations.
He stressed that Malaysian exporters must ensure they comply with international labour and environmental standards to avoid disruptions, pointing to previous US customs actions against shipments linked to labour concerns.
“The important thing is that what we do must not damage the environment, the country, or the climate,” he said.
The now-defunct ART had provided significant relief for Malaysia. During the height of the Trump-era trade tensions, Malaysian exports initially faced tariff exposure of up to 47 per cent, which was later negotiated down to 24 per cent.
Under the ART framework, the level was further lowered to 19 per cent, with zero-tariff privileges granted to 1,711 Malaysian products.
