Malaysia yet to receive US signal on semiconductor tariffs, says Johari

KUALA LUMPUR: Malaysia has not yet received any signals from the United States about potential tariffs on its semiconductor exports, stated Investment, Trade and Industry Minister Datuk Seri Johari Abdul Ghani. The government has not been notified by Washington regarding the imposition of tariffs on Malaysian semiconductor products, he told reporters during a press conference at EU-Malaysia Business Day 2026: Selangor in Focus.

Johari responded to a question about whether Malaysian semiconductor products would remain exempt from US tariffs. Earlier, he had mentioned that Malaysia aims to diversify its electrical and electronics (E&E) value chain, enhance economic growth drivers, and broaden export markets to lessen its exposure to global semiconductor cycle fluctuations.

As part of the New Industrial Master Plan (NIMP) 2030 and National Semiconductor Strategy (NSS), the government is concentrating on higher value-added, technology-intensive activities like integrated circuit design and advanced packaging.

When discussing Malaysia's trade negotiations with Washington, Johari mentioned that Section 301 discussions encompassed four primary areas: forced labor, excess production capacity, environmental standards, and government subsidies. Malaysia is in a favorable position concerning environmental compliance and government subsidies, as the country does not provide subsidies to companies specifically to support exports to overseas markets.

The environmental aspect was noted as being well-managed, with Malaysia adhering to the regulations set by developed economies. Regarding government subsidies, Johari emphasized that Malaysia does not provide such support to companies for exporting to foreign nations.

The forced labor issue has been addressed, with Malaysia facing a 10% rate, lower than the 12.5% faced by some other economies, Johari explained during his negotiations. However, the issue of excess production capacity remains unresolved, though Malaysia maintains that the country does not have a domestic overcapacity problem. Any excess capacity associated with Malaysian exports could originate from third countries, Johari stated, adding that any excess capacity linked to Malaysian exports would stem from foreign production rather than local manufacturing.

He emphasized that Malaysia had no domestic overcapacity and that any excess capacity linked to exports from the country would be from third countries rather than local production.

Johari also expressed Malaysia's desire for the US to identify the countries it believed were responsible for excess capacity, so appropriate actions could be taken. He pointed out that countries have their own laws and requirements governing access to their domestic markets, which exporters must comply with to maintain access to international trade. Malaysian exporters must adhere to each country's regulations and market-entry requirements to gain access to its market.