Malaysia will not cross certain "red lines" in its negotiations with the United States, its trade minister said on Wednesday, as the country continues talks with Washington to lower a 25% tariff imposed on its exports.

China has been a fierce critic of sweeping U.S. tariffs that Trump announced on April 2. He later delayed the implementation of most but China, which has said it will respond with its own tariffs on U.S. imports, now faces a deadline next month to negotiate a deal.

Malaysia will continue negotiations with the US on a lower tariff rate despite being the only Southeast Asian country to face an opposite outcome based on US President Donald Trump’s latest announcement.

Malaysia's trade ministry on Tuesday said a 25% tariff rate on its exports to the United States was not on top of an existing base tariff of 10% imposed by Washington, clarifying earlier remarks by the country's plantations and commodities minister Johari Abdul Ghani.

KUALA LUMPUR] Bank Negara Malaysia’s earlier-than-expected rate cut – the first since 2020 – is sending a sign that policymakers are bracing for a tougher second half of 2025 as trade tensions with the United States and weakening global demand cast a shadow over the country’s economic outlook.

Chip firms in Malaysia are holding back on investment and expansion as they await clarity on tariffs from the US, according to Malaysia Semiconductor Industry Association president Wong Siew Hai. “The companies are hoping that the US government will continue to exempt semiconductors from tariffs beyond Aug 1,

Tariff concerns will likely weigh on Malaysia’s currency, stocks and economy in the near term, according to analysts, after the country’s central bank cut its benchmark interest rate for the first time in five years.

For all the bluster and optimism from Prime Minister Anwar Ibrahim’s government over its efforts to negotiate a reduction on the proposed US tariffs, Malaysia was among several countries that instead saw its rate increase. On July 8, it was announced that the rate would go up one percentage point to 25 per cent.

Bank Negara Malaysia cut the overnight policy rate by 25 basis points to 2.75% on Wednesday, the first easing since July 2020.

Malaysia's Prime Minister Anwar Ibrahim on Wednesday urged Southeast Asian countries to "act with purpose" and enhance trade among each other in the face of global uncertainty, as regional foreign ministers met amid renewed jitters over U.

Malaysian chip companies are pausing investment and expansion plans as they await clearer guidance on U.S. tariff policies, according to Malaysia Semiconductor Industry Association President Wong Siew Hai.