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Malaysia and the United States agree to increase LNG and tech purchases as part of a trade agreement

Malaysia's trade minister announced on Monday that the country will spend up to 150 billion dollars in the next five year to purchase equipment from U.S. multinationals to support its semiconductor, aerospace, and data center sectors. This is part of an agreement with Washington for tariff reductions.

The United States announced that they would impose a tariff of 19% on Malaysia beginning August 8. This is lower than the 25% levied threatened last month.

Petroliam Nasional Berhad is a state energy company Tengku Aziz, Minister of Trade and Industry, told the Parliament that Malaysia would invest $70 billion over five years in the United States to reduce the trade deficit between the two nations.

Government data revealed that the United States had a goods-trade deficit of $24.8 billion with Malaysia in 2024.

Tengku Zafrul announced that the two countries are finalising a statement covering their commitments, after weeks of negotiation over the tariffs levied by the Trump administration.

Tengku Zaffrul stated that "despite expecting lower tariff rates the ministry believes these negotiations have achieved a reasonable result with the Malaysian offers."

Malaysia has also made other concessions. These include the reduction or elimination of duties on 98.4% U.S. imported goods, the easing some non-tariff obstacles, and the lifting of the requirement that U.S. cloud service providers and social media platforms contribute a portion of their Malaysian revenue to a government fund.

Tengku Zafrul, Malaysia's Minister of Trade and Industry, said last week that Malaysia has secured tariff exemptions for its pharmaceutical products, semiconductors, and other commodities exported to the United States.

He warned on Monday that he could still impose additional tariffs based on U.S. law if the chips are deemed to be of national security concern.

He said: "Therefore we must continue to prepare for any additional tariffs that may be imposed on semiconductor industry." (Reporting and editing by David Stanway; Rozanna Latiff)

(source: Reuters)