Trump announces 19pct tariff for Malaysia as new deadline looms

United States President Donald Trump has imposed a new 19 percent tariff rate on Malaysia, as the deadline takes effect on Aug 7.

The new rate represents a six percentage point reduction from the 25 percent reciprocal tariff announced last month.

On July 8, the US announced a blanket 25 percent tariff on all Malaysian products, separate from existing sectoral tariffs and one percentage point higher than the rate announced in April.

The White House had, in a fact sheet, announced that Trump signed an executive order yesterday, modifying the reciprocal tariff rates for certain countries to “further address our exploding, annual US goods trade deficits”.

“President Trump has committed that the US will do everything possible to get approvals quickly, professionally, and routinely to bring back manufacturing jobs for Americans,” the document read.

New rates for Asean neighbours

Cambodia and Thailand will both face a 19 percent tariff rate, a significant reduction from the previously imposed 36 percent.

The tariff cut was granted after both the Southeast Asian countries committed to an immediate and unconditional ceasefire in their border conflict, following Trump’s warning that continued fighting would prevent any trade agreements with either nation.

The same rate was also imposed on the Philippines and Indonesia.  

Myanmar and Laos were imposed with the second-highest rate at 40 percent under the revised list, while Syria received the highest rate at 41 percent.

Singapore’s rate is likely to remain at 10 percent.

Prime Minister Anwar Ibrahim had, during the tabling of the 13th Malaysia Plan (13MP) yesterday, announced that Trump would be unveiling the new rates today, expressing hope that it would not burden Malaysia’s economy.

He said this followed a conversation with Trump at 6am yesterday.

Anwar said Trump had also confirmed his attendance at the 47th Asean Summit, scheduled to be held in Kuala Lumpur this October.

Anwar further said that Trump had also expressed appreciation for Malaysia’s role in mediating the Thailand-Cambodia conflict.

The new rates go into effect on Aug 7, appearing to give negotiators a buffer period to hammer out deals.

Other deals

In the fact sheet, the White House stated that some of the affected nations “have agreed to, or are on the verge of concluding, meaningful trade and security agreements with the US” and will be subject to the increased tariffs until their deals are finalised.

Trump earlier said that his administration had struck a “couple” of deals but did not offer further details. It is unclear which nations he was referring to when he addressed reporters at the White House.

On April 2, Trump announced sweeping tariffs for countries across the world and later established a 10 percent baseline rate that would be imposed on countries while individual negotiations played out.

He imposed an Aug 1 deadline for nations to strike deals with his negotiating team, or face heightened import duties.

A separate order signed by Trump will increase the tariff rate on Canada from 25 percent to 35 percent effective Aug 1.

Most nations received tariff rates between 15 percent and 30 percent, but Iraq (35 percent), Laos (40 percent), Myanmar (40 percent), Switzerland (39 percent), and Syria (41 percent) were each tagged with higher rates.

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