Tariffs, Rare Earths To Dominate Trump’s ASEAN Summit Visit -- Economist

By Niam Seet Wei

KUALA LUMPUR, Oct 23 (Bernama) -- Tariffs, rare earths and other critical minerals are expected to be among the key topics discussed during United States (US) President Donald Trump’s upcoming visit to the 47th ASEAN Summit here, said economist Dr Goh Lim Thye.

Goh, a senior lecturer in economics at Universiti Malaya, said that while there are no confirmed indications that the US will lift tariffs on Malaysian exports, including pharmaceuticals and furniture, tariffs are expected to be a key item in bilateral discussions during the summit. 

“I believe Malaysia will advocate for sector-specific relief or review mechanisms, focusing on industries where value-added production benefits both economies,” he told Bernama.

Goh said that although full exemption or immediate tariff removal appears unlikely, a commitment from the US to review existing rates or to engage in structured negotiations would already represent a constructive step forward. 

“Even a positive signal of flexibility could help restore business confidence and encourage investment in Malaysia’s manufacturing base, which has been adapting to global supply chain realignments,” he said.

Currently, the US imposes a general 19 per cent tariff on exports from Malaysia.

On Sept 25, 2025, Trump announced that the US would impose a 100 per cent tariff on any branded or patented pharmaceutical product effective Oct 1, 2025, unless the company builds its pharmaceutical manufacturing plant in the US.

Similarly, Trump also announced that effective Oct 1, 2025, Washington would impose a 50 per cent tariff on all kitchen cabinets, bathroom vanities and associated products, as well as a 30 per cent tariff on upholstered furniture, measures from which Malaysia is not spared.

Malaysia seek to preserve semiconductor tariff exemption status

Regarding semiconductor exports, Goh said Malaysia currently enjoys a tariff exemption under a US national security review, and the exemption reflects Malaysia’s role as a trusted node in the global electronics supply chain. 

“Given the strong commercial interdependence between US technology firms and Malaysian manufacturing, I believe Malaysia will seek to preserve this zero-duty status through engagement at both government and industry levels. 

“It is in both countries’ interests to maintain stable semiconductor trade flows, which underpin wider technology and digital economy cooperation,” he said.

While future adjustments by the US to the tariff cannot be ruled out, Goh opined that maintaining the current exemption would signal continuity and confidence in Malaysia’s contribution to the global technology ecosystem.

Rare earths in focus as US seeks to broaden sourcing

On rare earths, Goh believed the topic would arise in the summit as part of the US effort to diversify sourcing and reduce dependency on single markets. 

He said Malaysia’s role in this area lies primarily in refining and downstream processing, supported by established operations such as Australia’s Lynas rare earths plant in Pahang. 

“Although Malaysia is not a major producer of rare earth ores, its processing capacity gives it a relevant position within the regional supply chain. 

“The issue is expected to surface within wider US-ASEAN economic talks focused on securing critical inputs for advanced industries and strengthening alternative supply routes across Southeast Asia,” he said.

Malaysia, which holds the ASEAN chairmanship this year under the theme “Inclusivity and Sustainability”, will host the 47th ASEAN Summit from Oct 26 to 28.

The event will see the participation of top leaders from the 10 ASEAN member states, along with key dialogue partners including the US, China, South Korea, Japan, and India.

On Wednesday (Oct 23), Communications Minister Datuk Fahmi Fadzil said that Trump is scheduled to arrive in Malaysia on Oct 26. 

This marks his first trip to Asia since beginning his second presidency in January 2025 and the first visit to Malaysia by a US president since Barack Obama’s visit in 2015.

Apart from Trump, prominent leaders such as Chinese Premier Li Qiang, Indian Prime Minister Narendra Modi, Brazilian President Luiz Inácio Lula da Silva, South African President Cyril Ramaphosa, European Council President António Costa, and Japanese Prime Minister Sanae Takaichi are among more than 20 global leaders scheduled to attend the summit.

-- BERNAMA