The United States and Malaysia have reached an agreement on reciprocal trade, aiming to strengthen their economic ties and provide greater market access for exporters from both countries. The new Agreement on Reciprocal Trade builds upon the existing United States-Malaysia Trade Investment Framework Agreement signed in 2004.
Under the terms of the agreement, Malaysia will offer preferential market access for U.S. exports in sectors such as chemicals, machinery, electrical equipment, metals, passenger vehicles, and various agricultural products including dairy, poultry, processed foods, beverages, pork, rice, and fuel ethanol.
The United States has agreed to maintain a 19 percent tariff rate on goods originating from Malaysia 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 affecting bilateral trade in key industrial areas. This includes 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 cosmetics, pharmaceuticals, and medical devices; and resolving concerns related to conformity assessment procedures.
Further commitments include easing restrictions on U.S. food and agricultural imports by accepting certificates issued by U.S. authorities and streamlining registration requirements. Malaysia will also implement regionalization measures regarding animal diseases.
On environmental matters, Malaysia has pledged to enforce its laws effectively by tackling illegal logging, fisheries subsidies that contribute to overfishing or illegal activity, unregulated fishing practices, and wildlife trafficking.
Efforts will be made by Malaysia to increase enforcement against markets known for counterfeiting and piracy. In labor rights protection, Malaysia has agreed to prevent forced labor and address violations in sectors at high risk for forced or child labor.
Digital trade provisions are included as well. Malaysia will not impose discriminatory digital services taxes on U.S. companies or require payments into domestic funds from social media platforms or cloud service providers based in the United States. The agreement supports cross-border data transfers with protections in place for business operations; it also backs a permanent moratorium at the World Trade Organization on customs duties for electronic transmissions and removes broadcasting airtime restrictions on U.S. programming.
Both countries have finalized commitments concerning intellectual property protection and enforcement as well as customs facilitation practices. They have also agreed to improve regulatory practices and address issues involving state-owned enterprises that could distort competition.
In addition to economic cooperation measures designed to enhance supply chain resilience and innovation—such as addressing duty evasion—the agreement covers investment security collaboration between the two nations.
Malaysia has committed not to ban or restrict exports of critical minerals or rare earth elements destined for the United States. It will work with American companies toward developing these sectors further—including granting extended operating licenses—and ensure no restrictions are placed on selling rare earth magnets to U.S firms.
Recent commercial deals noted between businesses from both countries include procurement agreements involving aircraft purchases (with options), semiconductor acquisitions valued at approximately USD150 billion along with aerospace components and data center equipment purchases; liquefied natural gas contracts estimated up to USD3.4 billion per year; coal and telecommunications product transactions worth USD204 million; plus capital fund investments totaling USD70 billion into the United States.
The United States may consider how this agreement affects national security when making decisions under section 232 of the Trade Expansion Act of 1962 (19 U.S.C. 1862).
To support balanced economic relations further discussions are ongoing between the U.S Department of Treasury and Bank Negara Malaysia regarding currency policy coordination.
Both governments plan to complete domestic formalities before bringing the agreement into force.