- Malaysia to invest $70B in U.S. semiconductors, aerospace, and data infrastructure.
- Petronas to buy $3.4B in U.S. LNG annually, boosting energy ties.
- U.S. tariffs on Malaysian goods lowered from 25% to 19%, effective August 8.
Malaysia has unveiled a landmark $150 billion trade agreement with the United States, focusing on high-tech equipment and energy supplies over the next five years. Announced by Minister of Investment, Trade and Industry Tengku Zafrul Aziz during a parliamentary session, the deal aims to strengthen bilateral ties, ease tariff tensions, and drive Malaysia’s technology-driven growth.
Under the agreement, Malaysia will invest $70 billion in American businesses and projects, focusing on semiconductors, aerospace, and data infrastructure, and support key sectors such as semiconductors, aircraft, and digital services. Additionally, Petroliam Nasional Berhad (Petronas) will buy $3.4 billion in liquefied natural gas (LNG) annually from the U.S., strengthening energy ties. These investments are designed to position Malaysia as a high-tech hub while addressing U.S. trade concerns.
The deal mitigates a U.S. tariff threat, lowering a proposed 25% tariff on Malaysian goods to 19%, effective August 8. This follows a $24.8 billion U.S. trade deficit with Malaysia in 2024. Tengku Zafrul called the outcome “reasonable,” crediting weeks of negotiations that included investment pledges and incentives. Malaysia will also eliminate tariffs on 98.4% of U.S. imports, easing market access for American firms.
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To attract U.S. tech companies, Malaysia has removed non-tariff barriers, including a rule requiring social media and cloud service providers to share revenue with a local government fund. This is expected to boost foreign investment in Malaysia’s growing tech ecosystem. The agreement also secures tariff exemptions for Malaysian pharmaceutical and semiconductor exports, though chips may face future tariffs under U.S. national security laws.
Malaysia is pursuing further tariff reductions for commodities such as rubber, cocoa, and palm oil, critical to its export economy. Both nations are working on a joint statement to finalize the agreement’s details, marking a milestone in their economic partnership. By fostering cross-border investments and reducing trade barriers, this deal strengthens Malaysia-U.S. relations and supports mutual growth in high-tech and energy sectors.