Agreement Between the United States of America and Malaysia on Reciprocal Trade

Date/Source: October 26, 2025 — Briefings & Statements

• Purpose: Establish a reciprocal trade framework to expand U.S.–Malaysia market access, align on economic/national security, and reduce tariff and non‑tariff barriers.

Key provisions

• Tariffs and quotas

  • Malaysia applies customs duties on U.S.-origin goods per Annex I Schedule 1.
  • U.S. applies revised reciprocal tariffs on Malaysian-origin goods per Annex I Schedule 2.
  • Malaysia won’t impose quantitative import restrictions except consistent with GATT 1994.

• Non‑tariff barriers

  • Import licensing: No restrictive licensing; any non‑automatic licensing must be transparent, non‑discriminatory, and not unduly burdensome.
  • Standards/TBT: Accept U.S. or international standards without extra conformity assessments; remove duplicative testing; treat U.S. conformity assessment bodies no less favorably.
  • Agriculture/SPS: Science- and risk-based measures; remove unjustified SPS barriers; avoid third‑country arrangements that disadvantage U.S. exports.
  • Geographical indications: Protect/recognize GIs only when qualities are attributable to origin; transparency and fairness required.
  • Cheese/meat terms: Mere use of listed terms cannot restrict U.S. market access.
  • Intellectual property: Robust protection and effective civil/criminal/border enforcement, including online infringement.
  • Services: Malaysia extends to the U.S. any services commitments it grants in future to third countries (ASEAN commitments excluded).
  • Good regulatory practices: Adopt GRP for transparent, predictable rulemaking.
  • Labor: Ban imports made with forced labor within two years; protect and enforce internationally recognized labor rights; don’t weaken protections to attract trade/investment.
  • Environment: Maintain/enforce environmental protections and governance.
  • Customs/trade facilitation: Enable pre‑arrival processing, paperless trade, and digitized border procedures.
  • Border measures/taxes: Coordinate with U.S. border‑adjusted measures; no discriminatory VAT; don’t challenge U.S. export tax rebates at the WTO.

• Digital trade and technology

  • No discriminatory digital services taxes.
  • Facilitate digital trade and trusted cross‑border data flows; collaborate on cybersecurity.
  • Consult the U.S. before entering digital trade deals jeopardizing essential U.S. interests.
  • No forced tech/source code transfers as a condition of market entry, with narrowly tailored exceptions.

• Rules of origin

  • If benefits accrue largely to third countries, a Party may establish rules of origin to ensure benefits accrue to the Parties.

• Economic and national security

  • Complementary actions: When the U.S. takes trade/security measures against third countries, Malaysia will adopt equivalent measures or an agreed timeline.
  • Export controls/sanctions/investment security: Cooperate on multilateral regimes; align with U.S. unilateral controls; restrict dealings with BIS Entity List and OFAC‑listed parties; explore inbound investment review for security.
  • Other measures: Streamline defense trade; combat transshipment/duty evasion via a cooperation agreement; U.S. may terminate if Malaysia signs certain FTAs that jeopardize essential U.S. interests; limits on nuclear purchases from specified countries unless no alternatives exist.

• Commercial considerations and opportunities

  • Investment: Malaysia to facilitate U.S. investment in critical sectors; U.S. EXIM/DFC may consider financing; Malaysia to facilitate about USD 70B of investment in the U.S. over 10 years.

• Implementation and enforcement

  • Entry into force: 60 days after exchange of notifications or as agreed.
  • Modifications: By written agreement; take effect 60 days after notification.
  • Enforcement: Parties retain rights to impose additional tariffs for remedies/security; consult when practicable.
  • Termination: Either Party may terminate with 180 days’ notice.
  • Annexes, appendices, footnotes are integral to the Agreement.