<figure id="attachment_3134102" aria-describedby="caption-attachment-3134102" style="width: 1600px" class="wp-caption alignnone"><img loading="lazy" class="size-full wp-image-3134102" src="https://media.freemalaysiatoday.com/wp-content/uploads/2025/08/d50a8095-donald-trump-1.jpg" alt="Donald Trump" width="1600" height="1000" /><figcaption id="caption-attachment-3134102" class="wp-caption-text">US president Donald Trump is scheduled to arrive in Malaysia on Sunday, marking his first visit to Asia since beginning his second term in January. (AP pic)</figcaption></figure>
PETALING JAYA: Tariffs, rare earths and other critical minerals are likely to dominate talks when US president Donald Trump attends the 47th Asean Summit next week, says an economist.
Goh Lim Thye, a senior economics lecturer at Universiti Malaya, said tariff issues were expected to feature prominently in bilateral discussions, although there were no clear signs that Washington would lift duties on Malaysian exports such as pharmaceuticals and furniture.
“Malaysia will likely push for sector-specific relief or review mechanisms, particularly in industries where value-added production benefits both sides,” said Goh in a Bernama report.
He said full exemptions or immediate tariff removals were unlikely, but a US commitment to review current rates or enter into structured negotiations would be a “constructive step forward”.
“Even a signal of flexibility could help restore business confidence and encourage investment in Malaysia’s manufacturing base, which has been adjusting to global supply chain shifts,” Goh said.
The US currently imposes a general 19% tariff on exports from Malaysia.
Trump last month announced that the US would impose a 100% tariff on branded or patented pharmaceuticals, starting Oct 1, unless companies establish production facilities in the US.
Washington will also apply a 50% tariff on kitchen cabinets and bathroom vanities and 30% on upholstered furniture – both of which affect Malaysian exporters.
Preserving zero-duty status on semiconductors
Malaysia currently enjoys a tariff exemption for semiconductor exports under a US national security review, reflecting its importance in the global electronics supply chain, Goh said.
“Given the strong interdependence between US tech firms and Malaysian manufacturing, Malaysia will seek to preserve its zero-duty status through engagement at both the government and industry levels.”
He added that maintaining the exemption would signal continuity and confidence in Malaysia’s role within the global technology ecosystem.
Importance given to rare earths
Goh also said rare earths are expected to feature on the agenda as Washington looks to diversify supply and reduce dependence on single markets.
He said although Malaysia is not a major producer of rare earth ores, its processing capacity gives it a relevant role in the regional supply chain.
“Malaysia’s strength lies in refining and downstream processing, supported by established facilities such as the Lynas rare earths plant in Pahang,” said Goh.
Trump is scheduled to arrive in Malaysia on Sunday, marking his first visit to Asia since beginning his second term in January &#8211; and the first trip to Malaysia by a US president since Barack Obama in 2015.
Other leaders expected to attend include Chinese premier Li Qiang, Brazilian president Luiz Inácio Lula da Silva, South African president Cyril Ramaphosa, European Council president António Costa and Japanese prime minister Sanae Takaichi.

MatchPoint Times

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