Malaysia has terminated the Reciprocal Trade Agreement (ART) signed with the United States. The country’s Minister of Investment, Trade and Industry Datuk Seri Johari Abdul Ghani said that the agreement is no longer valid and is being considered “null and void“. The decision came after the US Supreme Court ruled that some tariffs imposed by former President Donald Trump were illegal.
As a result, the trade relationship between the two countries is facing new uncertainties. Experts say that the situation could affect exports, supply chains and business plans. At the same time, political and diplomatic negotiations have also gained a new dimension.
Reason for Terminating the Agreement
Malaysia said that the legal basis for the US tariffs has weakened, which has undermined the effectiveness of the agreement. The court’s ruling declared the tariffs imposed under the International Emergency Economic Powers Act illegal.
As a result, the framework for reciprocal trade benefits has collapsed. Johari said that if tariffs are to be imposed, they must be on specific industrial sectors. Imposing tariffs overall is harmful to trade. Therefore, the government is thinking about a new strategy.
Impact on the Export Sector
This decision may put some of Malaysia’s important export sectors at risk. Electrical and electronic products, oil and gas, palm oil and rubber-based products are notable among them. These sectors are dependent on the US market. If the agreement is canceled, market access may be reduced.
As a result, there is a risk of increased costs for producers. At the same time, experts have warned that there may be disruptions in the supply system.
New Investigation Initiative
Meanwhile, the US has again started a trade investigation. This investigation is underway against 16 countries under Section 301 of the Trade Act, including Malaysia. It has been alleged that some countries are not following fair trade policies.
The investigation has created the possibility of imposing new tariffs. This could further complicate relations between the two countries. Malaysia said it is closely monitoring the situation.
Political Reaction
The country’s opposition coalition Perikatan Nasional has demanded a special parliamentary session to discuss the issue. The party leaders said that the cancellation of the agreement could have an impact on the economy and employment.
At the same time, they also highlighted the potential risks to the supply chain. The government is expected to provide a detailed explanation on this issue. As a result, discussions have also intensified in the political arena.
Future Actions
The Malaysian government is now emphasizing that exporters comply with labor and environmental standards. This is believed to make it easier to remain competitive in the international market. At the same time, plans are being made to find alternative markets.
Experts say that a long-term strategy is needed to deal with the uncertainty of trade policy. Joint efforts between the government and businessmen will be important. There has been a call for coordinated action to deal with this situation.
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@tfcvggolh6a Malaysia tears up trump deal.trade leverage collapses #economia #malaysia #trump #finance #trade
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