Malaysia will actively build trade relations with other countries, such as China, Russia and Brazil, instead of waiting for the impact of potential U.S. trade tariffs, Prime Minister Anwar Ibrahim said on Tuesday.
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There is a possibility that Malaysia can negotiate a reduction in threatened U.S. tariffs as Washington has agreed to further talks, but the global trade war meant economic growth was likely to be below target this year, the Prime Minister said Monday.
Malaysia is facing a 24% tariff rate in July for exports to the U.S., unless an agreement is struck between both countries.
“Although these are preliminary discussions… the United States government has agreed to further negotiate with Malaysia, and there is a possibility of reducing the reciprocal tariff imposed,” Prime Minister Anwar Ibrahim told parliament.
He said the suspension of most tariffs until July meant the impact was manageable for now, but said Malaysia was unlikely to meet its economic growth forecast of 4.5% to 5.5% this year.
Malaysia has said it is open to negotiating with the U.S. on non-tariff barriers, reducing its bilateral trade surplus, and exploring a bilateral trade agreement.
Last month, the central bank governor also said this year’s growth forecast would have to be lowered because of the global trade war.
Anwar said Malaysia would also aggressively explore new trading opportunities and boost exchanges between existing trade partners, including China and the European Union.
He said negotiations to improve a free-trade agreement between the ASEAN regional bloc and China will be finalised in the near future, with trade ministers from the respective countries set to meet on May 19.
Malaysia is chair of the 10-member Association of Southeast Asian Nations grouping this year.
Countries across export-driven Southeast Asia have been hit with steep tariffs, with six of 10 listed nations from the region slapped with levies of between 32% and 49%.