Minister said Malaysia will not cross the “red line” in U.S. tariff negotiations.
KUALA LUMPUR (Reuters) – Malaysia will not cross certain “red lines” in its negotiations with the United States as the country continues to hold talks with Washington to reduce the 25% tariff imposed on its exports.
Investment, Trade and Industry Minister Tengku Zafrul Aziz declined to elaborate on the restrictions, citing no confidentiality agreement, but said the U.S. has filed a claim to violate Malaysia's national interests and sovereignty.
He said the requirements involved Malaysia's domestic policies and laws, including digital taxes, e-commerce, medical standards, halal certification and government procurement.
“We don't want to reach an agreement for an agreement,” he told reporters.
“If this deal doesn’t benefit from Malaysia, we shouldn’t have a deal…we must be firmly consistent with it.”
Tengku Zafrul earlier in Singapore at Reuters' next Asian summit, Malaysia has no plans to retaliate against its 25% tariff on its exports to the United States and is “still optimistic” about a trade deal before August 1, when the tariffs will take effect.
The United States is Malaysia's second largest trading partner after China and its highest export destination, especially for semiconductors and electronics.
In a later press conference, he said he had no idea why the U.S. tariffs on Malaysia increased from the initial 24% to 25%, but said the country was committed to balancing trade with Washington and was convinced that any outstanding issues in the negotiations could be resolved.
“If you ask me… I tend to go over 50% (accidental) conclusions. But the timeline is key,” he said.
Tengku Zafrul said Malaysia’s negotiating team has been engaged to U.S. counterparts on at least 25 different occasions and has made a commitment to improve environmental and workforce protection and encourage digitalization and ensure cross-border data flows.
He added that Malaysia's offer to the United States also includes buying at least three new Boeing aircraft for Malaysian national airlines, as well as deals on semiconductors and technology.
(Reported by Rozanna Latiff and Mandy Leong;)
