Kuala Lumpur, 27 January 2026 – Malaysia has launched a comprehensive cost-benefit analysis of its Agreement on Reciprocal Trade (ART) with the United States, as the government seeks to assess the pact’s economic impact and ensure national interests are protected in the face of tariff uncertainties and evolving global trade dynamics.
The study was confirmed today by Datuk Seri Johari Abdul Ghani, Malaysia’s Investment, Trade and Industry Minister, during parliamentary proceedings. Johari said the review, which is expected to take between six and 12 months, is being conducted by his ministry in collaboration with key trade agencies, including the Malaysia External Trade Development Corporation (Matrade) and the Malaysian Investment Development Authority (MIDA), with analytical support from MIDF Research.
Focus on Exports and Trade Balance
A central focus of the study is Malaysia’s export exposure to the U.S. market, which was valued at approximately RM233.1 billion in recent trade data, with a trade surplus of around RM98.7 billion. Assessing how the ART affects these figures, especially amid tariff volatility, is crucial for policymakers weighing long-term economic strategy.
The ART was signed in October 2025 as a framework intended to stabilise trade relations after the U.S. introduced significant unilateral tariffs on Malaysian goods under its broader reciprocal tariff approach. While the pact provides for reciprocal tariff arrangements and other cooperative trade measures, Malaysia has not yet received formal notice from the U.S. regarding a ratification timeline, according to Johari.
Why the Review Matters
Opposition lawmakers and some commentators have previously raised questions about the scope and implications of the ART, urging more transparency and analysis of its potential effects on national sovereignty and economic performance. A detailed cost-benefit assessment now underway aims to quantify the economic gains and risks, from export competitiveness and investment flows to implications for small and medium enterprises (SMEs) that form part of Malaysia’s supply chains.
Johari stressed that the review will help ensure that Malaysia’s national economic interests are safeguarded and that any risks to trade or investment are properly understood before further steps are taken on ratifying or adjusting the agreement.
The comprehensive study reflects broader global trade uncertainty, particularly amid shifting tariff policies and evolving economic diplomacy between major economies, an environment that has encouraged countries like Malaysia to reassess trade accords with strategic partners to balance market access and economic resilience.
