IPPFA Sdn Bhd director and country economist Mohd Sedek Jantan said the "deal-blitz" approach has facilitated faster trade cooperation, tariff adjustments and new partnerships in critical minerals and supply-chains.

He said the trade agreement also strengthens Malaysia’s strategic position as a neutral hub for trade and investment, giving greater flexibility in a world of rising protectionism.

Commenting on the effect on Malaysia's economy regarding the maintained tariff structure and the lower tariff for 1,711 Malaysian export products to the US, he said it would improve the competitiveness of the country's exports, especially in manufacturing and electrical goods. 

"As a result, trade between Malaysia and the US could rise by 15–18 per cent, reaching around US$110 billion (US$1=RM4.2) by 2030 (modelling estimate). 

"In tandem, improved investor confidence may bring in incremental foreign direct investment (FDI) of US$12 billion-US$15 billion over the next few years (modelling estimate)," he told Bernama.

Meanwhile, regarding the tariff exemption that covers more than 12 per cent of Malaysia’s exports to the US, Mohd Sedek said it would boost export earnings, enhanced industrial competitiveness, including at least 10,000 new jobs creation, particularly in Penang’s agro-tech and high-value manufacture clusters.

The move will also spur more research and innovation, boosting the earnings of export-linked firms, while offering a platform for local small and medium enterprises (SMEs) to scale into Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) markets, he added.

Yesterday, Trump and Prime Minister Datuk Seri Anwar Ibrahim signed the ART, which enabled up to 1,711 Malaysian products, including palm oil, rubber and cocoa, as well as some pharmaceutical components and aerospace equipment to be exported to the US at tariffs lower than 19 per cent.

Investment, Trade and Industry Minister Tengku Datuk Seri Zafrul Abdul Aziz said these exempted items, valued at US$5.2 billion (RM21.96 billion), represented about 12 per cent of Malaysia’s total exports.

The US also has committed to maintain at 19 per cent the reciprocal tariffs first outlined in Executive Order 14257 dated April 2, 2025, as amended on originating goods of Malaysia.

On outlook, Mohd Sedek said Malaysia’s economy is expected to remain positive in 2026, growing between 4.3 per cent and 4.5 per cent, supported by stronger exports (underpinned by the Malaysia-US agreement), growing tourism and steady government spending.

"However, the key risks remain from global uncertainties, especially US-China tensions, but we also see upside potential," he said.

-- BERNAMA