The United States and Malaysia have announced an Agreement on Reciprocal Trade aimed at expanding economic cooperation and providing greater market access for exporters from both countries. The agreement builds on the existing United States-Malaysia Trade Investment Framework Agreement, which was signed in 2004.
According to the joint statement, Malaysia will offer preferential market access for U.S. exports of industrial goods such as chemicals, machinery, electrical equipment, metals, and passenger vehicles. In addition, U.S. agricultural products including dairy, horticultural goods, poultry, processed foods, beverages, pork, rice, and fuel ethanol will benefit from improved access to the Malaysian market.
On its part, the United States has agreed to maintain a 19 percent reciprocal tariff rate on Malaysian-originating goods as established by Executive Order 14257 of April 2, 2025. Certain products listed in Annex III to Executive Order 14346 of September 5, 2025 will receive a zero percent reciprocal tariff rate.
Malaysia has also committed to addressing non-tariff barriers that affect bilateral trade in key sectors. These measures include accepting U.S.-manufactured vehicles built to American safety and emissions standards; streamlining import licenses for alloy steel and pipe products; simplifying halal requirements for items like cosmetics and pharmaceuticals; and responding to concerns about conformity assessment procedures.
In terms of food and agriculture trade barriers, Malaysia will accept certificates issued by U.S. regulatory authorities and streamline registration requirements to facilitate imports of American food products. The country will also implement regionalization measures related to animal diseases.
Environmental protection is another area addressed in the agreement. Malaysia has pledged to enforce its environmental laws more effectively by tackling illegal logging and fishing activities as well as wildlife trafficking.
To combat counterfeiting and piracy issues in digital markets, Malaysia plans stronger enforcement actions against notorious markets. On labor rights protections: "To protect internationally recognized labor rights," the statement reads,"Malaysia has made commitments on preventing forced labor and effectively identifying and addressing labor law violations in sectors with a high-risk of forced labor and child labor."
The agreement covers digital trade issues as well. Malaysia commits not to impose discriminatory digital services taxes or require payments from U.S.-based social media platforms or cloud service providers into domestic funds. The country will also allow cross-border data transfers with appropriate safeguards; support a moratorium on customs duties for electronic transmissions at the World Trade Organization; and remove restrictions on terrestrial broadcasting airtime for U.S. programming.
Both nations have finalized commitments regarding intellectual property protection enforcement; customs facilitation; good regulatory practices; state-owned enterprise behavior; economic security cooperation; supply chain resilience; investment security; export controls; duty evasion prevention; development of critical minerals sectors—where Malaysia agrees not to ban or limit exports of these resources—and certainty for rare earth sector investments involving U.S companies.
Recent commercial deals between businesses from both countries were noted in the announcement: procurement agreements for up to 60 aircraft (30 confirmed plus options), purchases of semiconductors/aerospace/data center equipment valued at $150 billion USD collectively,capital fund investments totaling $70 billion USD, annual LNG purchases worth up to $3.4 billion USD per year (up to five million tonnes), coal/telecom product acquisitions valued at $204 million USD annually.
Discussions are ongoing between the U.S Department of Treasury and Bank Negara Malaysia regarding currency policy mutual understanding designed “to support a fair economic relationship.”
"In the coming weeks," according to the statement,"the United States and Malaysia will undertake domestic formalities in advance of the Agreement entering into force."