KUALA LUMPUR: Malaysia will spend up to $150 billion in the next five years to buy equipment from US multinationals for its semiconductor, aerospace and data centre sectors, part of a deal with Washington to cut tariffs, its trade minister said on Monday.
The United States announced last week that it would impose a 19% tariff on Malaysia starting from August 8, lower than a 25% levy threatened last month.
State energy firm Petroliam Nasional Berhad will buy liquefied natural gas worth $3.4 billion a year, while Malaysia will commit to $70 billion in cross-border investments in the United States over the next five years to address the trade imbalance between the two countries, minister Tengku Zafrul Aziz told parliament.
The United States ran a goods trade deficit with Malaysia of $24.8 billion in 2024, government data showed.
Tengku Zafrul said the two countries were finalising a joint statement covering the commitments made, following weeks of negotiations over the tariffs imposed by US President Donald Trump’s administration.
“Despite expecting lower tariff rates, the ministry believes that these negotiations have succeeded in achieving a result that is reasonable with the offers made by Malaysia,” Tengku Zafrul said.
Other concessions by Malaysia include reducing or abolishing duties on 98.4% of US imports, the easing of some non-tariff barriers, and the removal of a requirement for US social media platforms and cloud service providers to contribute part of their Malaysian revenues to a state fund.
Last week, Tengku Zafrul said Malaysia had secured tariff exemptions on its pharmaceutical products and semiconductors exported to the United States, and was seeking further cut-outs for commodities such as cocoa, rubber and palm oil.
On Monday, however, he warned that semiconductor chips may still be subject to additional tariffs under US laws based on national security reasons.
“Therefore, we need to continue to be prepared for any possible additional tariffs imposed on the semiconductor industry,” he said.
