Malaysia has declared the trade deal with the U.S. invalid after the Supreme Court ruled President Donald Trump‘s tariffs imposed under the International Emergency Economic Powers Act (IEEPA) illegal in February.
Datuk Seri Johari Abdul Ghani, Malaysia’s Investment, Trade, and Industry Minister, told reporters that the U.S.-Malaysia Agreement on Reciprocal Trade (ART) has been rendered ineffective. “It is not on hold. It is no longer there, it’s null and void,” said Johari, the New Straits Times reported on Sunday.
Johari told reporters that if tariffs were being justified based on a trade surplus, the authorities should clearly specify the industry involved and not impose blanket tariffs.
Regarding the new review launched by the U.S. under Section 301 last week, the Trade Minister said key Malaysian export sectors that could be affected include electrical and electronics, oil and gas, plantation commodities such as palm oil, gloves, and other rubber-based products. Johari emphasized that Malaysia must ensure its exporters comply with labor and environmental standards to avoid potential disruptions.
Malaysian opposition party, Perikatan Nasional, has called for a special sitting to discuss the nullified trade agreement, with secretary-general Takiyuddin Hassan warning the move could affect Malaysia’s export sectors and supply chains, Free Malaysia Today reported on Monday.
White House did not immediately respond to Benzinga‘s request for comments.
Uncertainty Looms Over Malaysia Trade Deal
The ART, inked between Trump and Malaysia’s Prime Minister Anwar Ibrahim on the sidelines of the 47th Asean Summit in Kuala Lumpur, on October 26, offered improved access for Malaysian exporters and made U.S. products more affordable for businesses and consumers. The reciprocal trade agreement covered about 12% of Malaysia’s exports to the U.S., with the U.S. maintaining a 19% reciprocal tariff on Malaysian imports, except for certain identified products.
Meanwhile, last week, the Trump administration launched a sweeping trade investigation targeting 16 partners, including Malaysia. The investigation was conducted under Section 301(b) of the Trade Act of 1974, which allows the U.S. to impose tariffs on imported goods from nations found to be engaging in unfair trade practices.
Notably, Trump had threatened to retaliate with “much higher” tariffs against any nation that attempts to use the recent US Supreme Court ruling to dismantle existing trade agreements.
Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by a Benzinga editor
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