KUALA LUMPUR: The risk of negative impact on semiconductor export performance to the United States (US) following the implementation of tariffs by President Donald Trump is seen as minimal for the time being, said the Ministry of Investment, Trade and Industry (MITI).

Investment, Trade, and Industry Minister Tengku Datuk Seri Zafrul Abdul Aziz said this is because Malaysia was excluded from the recent tariff increase imposed on several countries.

“Additionally, investment records also show that investments from the US remain strong, as the country is among the largest investors, totalling RM5.1 billion in the third quarter of 2024,” he said during the Minister’s Question Time in the Dewan Rakyat today.

Tengku Zafrul was responding to Datuk Ku Abd Rahman Ku Ismail (PN-Kubang Pasu), who asked MITI to outline the government’s steps in addressing geopolitical issues and global trade uncertainties, particularly the possibility of tariff increases that would affect Malaysia’s exports, especially to the US.

The minister said that Malaysia also signed a memorandum of cooperation on semiconductor supply chain resilience with the US on May 10, 2022.

He said this agreement reflects the ongoing commitment of both countries to ensure a strong and resilient semiconductor supply chain and strengthen economic and strategic ties between Malaysia and the US.

“Therefore, the ministry is confident that existing investors from the US will remain in Malaysia and continue to grow to strengthen their global supply chain,” he said.

Tengku Zafrul said that the US is Malaysia’s third-largest trading partner in 2024, with a trading volume of RM324.9 billion, accounting for 11.3 per cent of Malaysia’s total trade.

“Exports to the United States amounted to RM198.6 billion, equivalent to 13.2 per cent of Malaysia’s total exports, while imports from the United States reached RM126.3 billion, equivalent to 9.2 per cent of Malaysia’s total imports.

“In terms of investment, the US is among the largest investors, and so far, Malaysia has become the preferred investment destination for more than 600 American companies,” he said.

In this regard, Tengku Zafrul said the government is proactively trying to maintain and further strengthen the good and dynamic bilateral trade and investment relations with the US to avoid tariff increases like those imposed on China, Canada, and Mexico.

The government also said it would ensure that Malaysia remains a reliable trading and investment partner for all its partners, including the US.

“This includes through a conducive and investor-friendly investment ecosystem, effective export control regulations and strategic trade management, as well as compliance with international standards that reassure investors,” he said. – Bernama