The Vibes
22 July 2025
Malaysia strengthens strategic response to US tariffs with focus on resilience and high-value sectors
Effort aims to ensure that the country's strategic and economic industries remain resilient and competitive in an increasingly challenging and uncertain global environment - July 22, 2025
MALAYSIA is intensifying its efforts to mitigate the impact of United States (US) retaliatory tariffs, focusing on fortifying strategic industries and supporting local businesses through a series of targeted initiatives.
Investment, Trade and Industry Minister Tengku Datuk Seri Zafrul Abdul Aziz told the Dewan Rakyat that the National Geoeconomic Command Centre (NGCC) has been established to monitor, evaluate, and coordinate Malaysia’s response to global trade disruptions, including tariff shocks and non-tariff barriers.
"This effort aims to ensure that the country's strategic and economic industries remain resilient and competitive in an increasingly challenging and uncertain global environment," said Tengku Zafrul in response to a question from Mohd Syahir Che Sulaiman (PN–Bachok).
Mohd Syahir had queried the government’s approach to addressing the impact of the US tariffs, particularly how state governments would be involved in restructuring investment strategies and incentives, and in helping local industries adapt.
Tengku Zafrul emphasised that Investment Promotion Agencies (IPAs) would continue working closely with state governments to minimise the impact on local industries and ensure coherence in national and regional investment policies.
He noted that a Special Parliamentary Session was convened by Prime Minister Datuk Seri Anwar Ibrahim on 5 May to address the tariff issue, during which several support measures for small and medium enterprises (SMEs) were announced.
Among the initiatives, RM20 million has been allocated to the Malaysia External Trade Development Corporation to assist SMEs in accessing new markets. In addition, RM500 million in easy financing has been channelled through development financial institutions for SMEs affected by the tariffs.
The government has also expanded the Business Financing Guarantee Scheme (SJPP) by RM1 billion to help SME exporters secure financing.
To accelerate transformation in high-growth, high-value sectors, the Ministry of Finance has launched the Government-linked Enterprises Activation and Reform Programme (GEAR-uP), backed by RM25 billion in funding.
Tengku Zafrul further clarified that following the imposition of retaliatory tariffs by US President Donald Trump on 1 April 2025, Malaysia has opted not to respond with countermeasures.
"Although we are proactive, firm, and open in our negotiations with the US, we have several 'red lines' that were recently agreed upon by the new Cabinet," he said.
These include safeguarding the Bumiputera policy on ownership in local and strategic industries, giving preference to local and Bumiputera firms in government procurement, upholding halal certification standards recognised by the Department of Islamic Development Malaysia (Jakim), and protecting intellectual property rights.
"The Prime Minister has assured that in pursuing a reciprocal trade agreement, the government will not compromise on matters related to national sovereignty," said Tengku Zafrul.
He concluded by affirming that engagement with the US would continue in a "careful, transparent, and professional manner to ensure that every decision made benefits the people and supports balanced economic development". - July 22, 2025