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(Bloomberg) -- Malaysia intends to engage with the US on President Donald Trump’s planned tariffs on chip imports, cautioning that such duties could hurt firms based in the Southeast Asian nation.
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Minister of Investment, Trade and Industry Zafrul Aziz said he would depart for the US in the second quarter 2025 for talks on how to move forward in a way that would benefit both countries.
“We are concerned if there is any tariff or export restrictions on semiconductors,” Zafrul said in Kuala Lumpur on Monday. “As such, engagement is key, but it will definitely be negative for the companies that are based in Malaysia if the tariffs happen.”
The US is Malaysia’s third-largest market for semiconductor exports. Trump said last week he would likely impose tariffs on automobile, semiconductor and pharmaceutical imports of around 25%, with an announcement coming as soon as April 2.
The Southeast Asian nation last year pledged at least 25 billion ringgit ($5.7 billion) to support its semiconductor industry, seeking to increase its role as tensions between the US and China shake up global supply chains. Malaysia’s semiconductor industry aims to double its exports to 1.2 trillion ringgit by 2030, cementing its position as the sixth-largest chip exporter in the world.
Malaysia hosts a number of chip-packaging facilities for Intel Corp., GlobalFoundries Inc. and Infineon Technologies AG, making it a key regional hub in the global supply chain.
Most of the companies exporting semiconductors out of Malaysia are US firms, according to Zafrul. “All these companies that are based here are very much integrated into the supply chain in US,” he added.
--With assistance from Anisah Shukry.
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