Malaysian PM says chip tariff ‘not an issue’ after talks with Trump

Malaysian Prime Minister Anwar Ibrahim said that US President Donald Trump assured him any US tariffs on Malaysian semiconductors would be addressed “at the appropriate time.”

“For now, it’s not an issue,” Anwar said on October 27, following talks with Trump in Kuala Lumpur.

Trump is weighing tariffs of up to 300% on semiconductor imports, which could impact Malaysia, the world’s sixth-largest chip exporter.

The US is Malaysia’s third-largest market for semiconductor exports.

Malaysia pledged at least 25 billion ringgit (US$5.9 billion) last year to strengthen its semiconductor sector as global supply chains shift.

The country aims to double its semiconductor exports to 1.2 trillion ringgit (US$ by 2030.

On October 26, the US and Malaysia signed a trade deal that keeps the tariff rate on Malaysian goods at 19%.

As part of the agreement, Malaysia will invest US$70 billion in the US over ten years, and Malaysian companies will purchase US$150 billion in US semiconductors, aerospace components, and data center equipment over five years.

🔗 Source: Bloomberg

🧠 Food for thought

Implications, context, and why it matters.

Tariff carve-out for semiconductors remains unconfirmed

Malaysia locked in a 19% baseline tariff. Trump is weighing tariffs up to 300% on semiconductor imports under a Section 232 national security probe (a US trade law that allows tariffs when imports threaten national security) opened on April 1 2025 covering “semiconductor substrates, bare wafers, legacy and leading-edge chips” and related products 1.
Public comment runs to May 7, 2025 while the probe continues 1. Anwar said chip tariffs will be handled “at the appropriate time”, so no exemption now. Executive Order 14257 (a US order on reciprocal tariffs) excluded semiconductors from extra duties 2. The US-EU Framework Agreement (a pact between the United States and the European Union) exempted categories such as aircraft plus generic pharmaceuticals 3.

Data center suppliers can target Malaysia’s US$150 billion procurement

Malaysia plans to buy US$150 billion in US semiconductors, aerospace, and data center gear over five years. That tracks with a market set to top US$13.5 billion by 2030 4.
Johor could reach 60% of capacity by 2030, and by December 2024, 38 projects had Electricity Supply Agreements (contracts with the national utility to provide power) totaling 5.9 GW 4 5. US vendors and investors can tap the Green Lane Pathway (a fast-track process that cut grid connection times from 36 to 48 months to 12 months) 4. The October 2025 Sustainable Data Centre Framework (government guidance for siting and efficiency) will guide projects 4, plus the Johor-Singapore Special Economic Zone (SEZ) should speed cross-border links 4.