Only one-third of exports to US face new tariff

KUALA LUMPUR, Aug 2, 2026 – Only about one-third of Malaysia’s exports to the United States will be subject to the new 10 per cent tariff under the US Trade Representative’s (USTR) latest Section 301 action, according to estimates.

About 31.9 per cent of Malaysia’s exports to the US fall under the tariff, slightly lower than the 33 per cent previously imposed under Section 122. This adjustment moves an estimated RM3.3 billion of exports out of the tariff’s scope, reducing the effective trade-weighted tariff rate to 5.1 per cent from 5.2 per cent.

exports to US

The new tariff, effective July 24, replaced the Section 122 duty that expired after its 150-day duration. Malaysia and Indonesia were assigned a 10 per cent rate, compared with 12.5 per cent for Thailand and Singapore, reflecting commitments under agreements with the US on forced labour import prohibitions.

Malaysia secured exemptions for palm oil, palm kernel oil, oleochemicals, and wood products, worth about RM2.1 billion, alongside semiconductor testing instruments added to the universal exemption list.

Rubber gloves remain the largest tariffed group at RM6.5 billion, followed by printing machinery parts and medical instruments at RM4.5 billion each. Analysts caution Malaysia’s exposure could rise once a separate Section 301 investigation into structural excess capacity concludes.,

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