MALAYSIA-US TRADE DEAL FORMALISES EARLIER DETAILS - OCBC

KUALA LUMPUR, Oct 29 (Bernama) -- The Malaysia-United States (US) trade agreement formalised on Oct 26, 2025 is largely seen as the formalisation of previously provided information, said OCBC. 

In its Global Markets Research note today, it said the agreement reiterated that the tariff rate for Malaysia’s exports to the US would remain at 19 per cent, with a clearer list of exemptions.

On tariff rates, it said Minister of Investment, Trade and Industry Tengku Datuk Seri Zafrul Aziz added that 1,711 tariff lines are now exempt from tariffs. 

"This totals US$5.2 billion (12 per cent of exports). This is, in addition to semiconductor exports, which are still exempt from reciprocal tariffs, and accounted for about 26 per cent of total exports to the US in the first half of 2025 alongside some other exemptions," it said. 

It noted that the announcement on semiconductor tariffs is still pending and depending on the nature of the tariffs and conditions attached, Malaysia’s exports to the US could be significantly impacted.

On non-tariff discussions, it said the agreements around non-tariff measures points to the need for a greater ease of doing business within Malaysia for US firms. 

Easier access to import licensing, reduced need for technical regulations and smoother customs and facilitations were some measures agreed upon, it added. 

The discussions on greater access for US agriculture products, such as cheese and meats, underscores the US administration’s push for greater market access to ASEAN for agricultural products.   

The bank has maintained its 2025 gross domestic product (GDP) growth forecast at 4.6 per cent year-on-year and 2026 forecast at 3.8 per cent.

"The announcement on semiconductor tariffs will be the next trigger for us to review our forecasts. 

"In terms of monetary policy, we still expect Bank Negara Malaysia to keep the policy rate unchanged at 2.75 per cent," it said. 

-- BERNAMA