On October 26, 2025, the United States and the Government of Malaysia signed an Agreement on Reciprocal Trade. The agreement is intended to “enhance reciprocity in their bilateral trade relationship by addressing tariff and non-tariff barriers;” and seeks to “strengthen their commercial relationship through increased alignment on national and regional economic security matters.” The agreement will next be submitted to each country’s legislative body for ratification.
Key terms of the agreement include:
- Malaysia’s elimination or reduction of tariffs on nearly all U.S. exports over a period of years based on “staging categories” for their elimination set forth in an Annex to the agreement, establishment of non-discriminatory or preferential market access for U.S. agricultural and industrial goods, and removal of quotas on imports from the United States unless otherwise accepted by both parties.
- The continuation of U.S. reciprocal tariffs at 19 percent for imported goods from Malaysia, as first set forth in Executive Order 14257 of April 2, 2025, but tariff exclusions for certain imports.
- Malaysia’s commitment to address non-tariff barriers, starting with the acceptance of U.S.-manufactured vehicles built to U.S. motor vehicle safety and emissions standards, the streamlining of import licenses for U.S. alloy steel and pipe products and steel-containing goods, the streamlining of product requirements for cosmetics, pharmaceuticals, and medical devices, and the review of U.S. concerns with conformity assessment procedures.
- Malaysia’s commitment to address and prevent non-tariff barriers to U.S. food and agricultural products in the Malaysian market, starting with the acceptance of currently agreed certificates issued by U.S. regulatory authorities, the streamlining of halal and facility registration requirements to facilitate imports of U.S. food and agricultural products, and the implementation of U.S. regionalization for animal diseases.
- Malaysia’s commitment to adopting and maintaining high levels of environmental protection and to effectively enforcing its environmental laws, such as measures to address illegal logging, fisheries subsidies, illegal, unreported, and unregulated fishing, and the illegal wildlife trade.
- Malaysia’s commitment to increasing enforcement against notorious markets for counterfeiting and piracy.
- Malaysia’s commitment to protecting internationally recognized labor rights, such as the prevention of forced labor and the effective identification and enforcement of labor law violations in sectors with a high-risk of forced labor and child labor.
- Malaysia’s commitment (1) to refrain from imposing digital services taxes or requiring U.S. social media platforms and cloud service providers to pay into Malaysia’s domestic fund, (2) to ensure the transfer of data across trusted borders, with appropriate protections, for the conduct of business, and (3) to remove terrestrial broadcasting airtime restrictions on U.S. programming.
- Finalization of bilateral commitments to address intellectual property protection and enforcement, customs and trade facilitation, good regulatory practices, and distortionary behaviors of state-owned enterprises.
- Bilateral commitment to strengthening economic and national security cooperation and to enhancing supply chain resilience and innovation for addressing duty evasion and for cooperation on investment security and export controls.
In addition, the United States and Malaysia signed a Memorandum of Understanding concerning cooperation to diversify global critical minerals supply chains and to promote trade and investment between the parties in critical mineral resource exploration, extraction, processing and refining, manufacturing, and recycling and recovery.