Most importantly, the Ministry of Investment, Trade and Industry (MITI) said that Malaysia had stood firm on various ‘red line’ items, and the 19% tariff rate was achieved without compromising the nation’s sovereign right to implement key policies to support the nation’s socio-economic stability and growth.
Within ASEAN, Malaysia’s new tariff rate is on par with that of Indonesia (19%), Philippines (19%), Thailand (19%), and Cambodia (19%), marginally lower than Vietnam (20%) while it is markedly lower than Myanmar (40%), Laos (40%) and Brunei (25%).
The US Executive Order also stated all goods that are considered to have been transshipped to avoid applicable duties will be subject to an additional 40% tariff. In this regard, the chamber is relieved that MITI has tightened rules to ensure exports to the US are properly documented, in a bid to curb illegal transshipment and ensuring the proper origin of goods. MITI is now the sole issuer of non-preferential certificates of origin (NPCOs) for exports to the US, effective 6 May 2025. MITI is also enhancing audits and working with customs to investigate and take action against mis-declaration and illicit transshipment.
The ACCCIM welcomes MITI’s several key strategies to mitigate the impact of tariffs on exports, including promoting the use of Malaysia’s 18 Free Trade Agreements to diversify markets, advancing industrial reforms under key policies like the New Industrial Master Plan 2030, Green Investment Strategy, and National Semiconductor Strategy to enhance efficiency and productivity as well as exploring further government support for businesses, particularly small and medium enterprises, to adapt to the new baseline tariff rate.
ACCCIM President Datuk Ng Yih Pyng said that the chamber will continue to keep members updated on the tariffs impact and other issues that impact businesses in line with its mandate to represent the voice of Malaysian business community. The ACCCIM proposes the following measures:
(a) Widen and increase Allowance for Increased Exports (AIE) to expand exports. Currently, an allowance equal to 10% of the value of increased exports, deductible against 70% of statutory income; and
(b) Increase the lifetime cap of the Market Development Grant to RM500,000, while raising the per-claim ceiling to RM35,000 for international trade fairs and exhibitions, and RM10,000 for locally held trade fairs and exhibitions. The current limits of RM5,000 for local and RM25,000 for overseas reimbursement are deemed inadequate.
