KUALA LUMPUR: Malaysia has requested further information from the United States regarding its proposal to impose a 100% tariff on semiconductor chips manufactured in countries without US-based production facilities.
Investment, Trade and Industry Minister Tengku Datuk Seri Zafrul Abdul Aziz said his ministry has reached out to both the US Trade Representative and the Department of Commerce to better understand the scope and implementation of the proposed tariff.
“We hope that any policy changes, including criteria for exclusions, can be communicated and discussed in advance, so that Malaysia’s position as a strategic trading partner is maintained,” Zafrul said during ministerial question time in Parliament on Thursday.
His remarks come after former US President Donald Trump reportedly stated on Wednesday that a 100% tariff would be applied to all imported semiconductor chips and related products — with exceptions for companies that have already committed to manufacturing in the US or are in the process of doing so.
Zafrul emphasized that no formal announcement has been made yet. As such, Malaysian semiconductor exports to the US remain exempt from the 19% reciprocal tariff set to take effect on Aug 8, 2025.
However, he noted that the exemption remains provisional, pending the outcome of an investigation by the US Department of Commerce under Section 232 of the Trade Expansion Act of 1962. Depending on the findings, tariffs could still be introduced.
In 2024, Malaysia exported nearly RM120 billion worth of electrical and electronic (E&E) products to the US, representing about 20% of its total E&E exports. Semiconductor products accounted for RM60.6 billion of that total.
Zafrul also highlighted the importance of the semiconductor industry to Malaysia’s economy, which supports 72,000 skilled jobs and involves 7,200 local suppliers — many of which are small and medium enterprises.
“If semiconductor products are eventually subjected to US tariffs, the impact on Malaysia could be substantial. Our access to the US market could be threatened, as our products may become less competitive due to higher costs,” he warned.
To address potential risks, the ministry will engage in outreach efforts with exporters and industry players along the supply chain. It also plans to encourage diversification into other export markets to reduce dependence on the US.
