(Washington, Kuala Lumpur, Phnom Penh, 3rd – Comprehensive report) On Thursday, U.S. President Trump signed an executive order imposing reciprocal tariffs ranging from 19% to 40% on multiple Southeast Asian countries. In this, Malaysia’s tariff has been reduced from the original 25% to 19%, while Thailand and Cambodia have dropped from 36% to 19%.
On Friday (August 1), Malaysian media quoted Malaysia’s Minister of Investment, Trade, and Industry, Zafrul, as saying that the new tariff rate will take effect next Friday (August 8).
Zafrul emphasized that Malaysia held the line during the negotiations, and key national policies were not compromised. For example, Malaysia did not accept the U.S. request to remove domestic taxes on automobiles, tobacco, and alcohol products.
Malaysia Grants Zero Tariffs for Nearly 7,000 U.S. Products, Commits to Further Boeing Purchases
The U.S. also proposed a zero-tariff list covering 11,260 items exported to Malaysia. Malaysia only agreed to impose zero tariffs on nearly 7,000 U.S. products, about 61% of the list.
For pharmaceuticals and semiconductors exported from Malaysia to the U.S., the status quo remains, and they are exempted from the 19% import tariff.
Malaysia also committed to purchasing another 30 Boeing airliners, worth USD 9.5 billion (about RM 40.7 billion). Previously, Prime Minister Anwar announced in March that Malaysia Aviation Group had ordered 30 Boeing 737 series aircraft, expected to be delivered by 2030.
Last year, the U.S. had a trade deficit of USD 24.8 billion (about RM 106.6 billion) with Malaysia, and the U.S. is also Malaysia’s largest source of foreign investment.
Last week, the U.S. had already announced reciprocal tariffs of 19% on goods from Indonesia and the Philippines, and 20% for Vietnam. Now, with new rates for Malaysia, Thailand, and Cambodia set at 19%, these countries are largely relieved as their levies are on par with regional neighbors.
On Friday, Thailand government spokesperson described this as a major victory in a statement, “demonstrating a win-win solution that safeguards Thailand’s export base and long-term economic stability.”
Prior to the U.S. tariff announcement, Thailand pledged to cut tariffs on 90% of U.S. imported goods to zero, aiming to expand market access for American products. Thailand also promised to drastically reduce its USD 46 billion trade surplus with the U.S. by 70% within three years.
Last year, the U.S. was Thailand’s largest export market, accounting for about 18% of Thailand’s total exports.
On the same day, Cambodian Prime Minister Hun Manet posted on Facebook: “(The 19% tariff agreement) is the best news for the Cambodian people and for our country’s continued economic development.”
Cambodia announced the elimination of tariffs on all U.S. imports, and plans to purchase 10 Boeing 737 Max 8 jets for Cambodia Airlines, with an option to buy 10 more of the same model.
The U.S. twice lowered its tariffs on Cambodia—from an initial 49% down to 36%, and now to 19%. Cambodian Deputy Prime Minister Sun Chanthol said the new rate would prevent Cambodia’s apparel and footwear industries from collapsing and maintain its regional competitiveness.
Official data shows Cambodia has a significant trade surplus with the U.S.; last year, exports to the U.S. accounted for 37.9% of its total exports, totaling nearly USD 10 billion.
In contrast to most Southeast Asian countries, Laos and Myanmar face a 40% tariff rate—the world’s second highest, only behind Syria’s 41%. The White House did not specify the reasons for the higher tariffs, and U.S. trade volume with these countries is relatively small.
On Friday (August 1), Malaysian media quoted Malaysia’s Minister of Investment, Trade, and Industry, Zafrul, as saying that the new tariff rate will take effect next Friday (August 8).
Zafrul emphasized that Malaysia held the line during the negotiations, and key national policies were not compromised. For example, Malaysia did not accept the U.S. request to remove domestic taxes on automobiles, tobacco, and alcohol products.
Malaysia Grants Zero Tariffs for Nearly 7,000 U.S. Products, Commits to Further Boeing Purchases
The U.S. also proposed a zero-tariff list covering 11,260 items exported to Malaysia. Malaysia only agreed to impose zero tariffs on nearly 7,000 U.S. products, about 61% of the list.
For pharmaceuticals and semiconductors exported from Malaysia to the U.S., the status quo remains, and they are exempted from the 19% import tariff.
Malaysia also committed to purchasing another 30 Boeing airliners, worth USD 9.5 billion (about RM 40.7 billion). Previously, Prime Minister Anwar announced in March that Malaysia Aviation Group had ordered 30 Boeing 737 series aircraft, expected to be delivered by 2030.
Last year, the U.S. had a trade deficit of USD 24.8 billion (about RM 106.6 billion) with Malaysia, and the U.S. is also Malaysia’s largest source of foreign investment.
Last week, the U.S. had already announced reciprocal tariffs of 19% on goods from Indonesia and the Philippines, and 20% for Vietnam. Now, with new rates for Malaysia, Thailand, and Cambodia set at 19%, these countries are largely relieved as their levies are on par with regional neighbors.
On Friday, Thailand government spokesperson described this as a major victory in a statement, “demonstrating a win-win solution that safeguards Thailand’s export base and long-term economic stability.”
Prior to the U.S. tariff announcement, Thailand pledged to cut tariffs on 90% of U.S. imported goods to zero, aiming to expand market access for American products. Thailand also promised to drastically reduce its USD 46 billion trade surplus with the U.S. by 70% within three years.
Last year, the U.S. was Thailand’s largest export market, accounting for about 18% of Thailand’s total exports.
On the same day, Cambodian Prime Minister Hun Manet posted on Facebook: “(The 19% tariff agreement) is the best news for the Cambodian people and for our country’s continued economic development.”
Cambodia announced the elimination of tariffs on all U.S. imports, and plans to purchase 10 Boeing 737 Max 8 jets for Cambodia Airlines, with an option to buy 10 more of the same model.
The U.S. twice lowered its tariffs on Cambodia—from an initial 49% down to 36%, and now to 19%. Cambodian Deputy Prime Minister Sun Chanthol said the new rate would prevent Cambodia’s apparel and footwear industries from collapsing and maintain its regional competitiveness.
Official data shows Cambodia has a significant trade surplus with the U.S.; last year, exports to the U.S. accounted for 37.9% of its total exports, totaling nearly USD 10 billion.
In contrast to most Southeast Asian countries, Laos and Myanmar face a 40% tariff rate—the world’s second highest, only behind Syria’s 41%. The White House did not specify the reasons for the higher tariffs, and U.S. trade volume with these countries is relatively small.