Malaysia Gears Up for US Tariff Talks to Protect RM20 Billion in Commodity Exports

Malaysia aims to safeguard its RM20-21 billion commodities exports to the US, including RM4.9 billion in palm oil, through upcoming tariff negotiations, said Plantation and Commodities Minister Johari Ghani. Other exports include rubber gloves (RM8 billion), wood products (RM6.5 billion), and cocoa (RM1.6 billion).

Commodity Exports

While Europe, India, and China dominate palm oil exports, the US market remains vital. Malaysia faces a 10% tariff on palm oil, with a suspended 24% additional duty, compared to Indonesia’s 32%. Senior trade official Mastura Ahmad Mustafa will lead talks to reduce tariffs, address non-tariff barriers, and balance the US$25 billion trade deficit.

Explanation of Tariff Issue and Malaysia’s Efforts:

The tariff issue stems from the US imposing a 10% duty on Malaysian palm oil, with an additional 24% tariff currently suspended, while Indonesia faces a higher 32% additional duty. This creates a competitive disadvantage for Malaysia compared to other exporters, though it fares better than Indonesia. Non-tariff barriers, such as environmental or labor standards, further complicate access to the US market. The US$25 billion trade imbalance, favoring Malaysia, adds pressure to negotiations. Malaysia’s efforts include appointing Mastura Ahmad Mustafa as chief negotiator to secure tariff reductions, ease non-tariff restrictions, and maintain market access for its agricultural commodities. By prioritizing dialogue, Malaysia seeks to mitigate tensions, protect its export revenue, and strengthen bilateral trade relations with the US.

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