US Hits 15% Tariff But What Does It Mean For Malaysia’s Trade Deal?

Countries that trade with the US is hit with another tariff curveball.

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Malaysia signed the Agreement on Reciprocal Trade (ART) with the United States on 26 October 2025 during the 47^th ASEAN Summit in Kuala Lumpur.

The deal signed between Prime Minister Datuk Seri Anwar Ibrahim and US President Donald Trump was intended to ensure stable trade with agreed-upon tariffs and enhance market access.

Under the agreement, Malaysia’s tariff rate was negotiated down to 19%, from the initial 25%.

Some have voiced concerns about ART, especially the impact on Malaysia’s economic sovereignty.

Things may change

However, all the negotiations may have come to naught after the United States Supreme Court ruled that Trump’s sweeping tariffs were unlawful.

In a 6-3 decision, the court agreed that Trump exceeded his authority by invoking the 1977 law, which was designed to allow US presidents to respond to specific national emergencies.

The court finds tariffs a form of taxation, and under Article I of the Constitution, the power to tax belongs exclusively to Congress.

Following the ruling, Trump called the Supreme Court judges ‘’fools and lapdogs’’ who are ‘’very unpatriotic and disloyal to our Constitution.’’

Trump immediately signed an executive order under Section 122 of the US Trade Act of 1974 to impose a blanket 10% tariff on all countries with which the US trades, starting on 24 February.

On Saturday, he raised the tariff to 15%, the highest rate allowed under the same trade law.

Trump is the first US president to use this law to impose tariffs. Under this law, tariffs can be imposed for only 150 days unless the US Congress agrees to extend them.

What now?

The new tariff rates have cast uncertainty over the future of trade deals that many countries signed with the US.

It’s not known yet whether these countries, like Malaysia, will be charged the new 15% tariff or follow the agreed rate as signed in the trade deals.

If you ask Trump, he said some of these trade agreements will stand as they are.

What is Malaysia’s response?

Anwar said Putrajaya is waiting for a detailed briefing from the Ministry of Investment, Trade, and Industry (MITI) before deciding on a response to the new US trade tariffs.

The matter will be discussed further at the Cabinet meeting on Friday.

MITI is currently studying the impact of the new tariffs and is coordinating with officials in Washington, DC, and Malaysia’s Asean counterparts to determine the most appropriate response.

As it stands, the US is Malaysia’s third-largest trading partner. The total trade between the two nations reached approximately RM367 billion in 2025.

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