Malaysia targeting lowest possible tariff rate in US talks, trade minister says

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KUALA LUMPUR (Reuters) -Malaysia is aiming for the lowest possible tariff on goods exported to the United States, its trade minister said on Thursday, denying reports that it is targeting a rate of 20%.

Malaysia is facing a 25% tariff on its goods unless it can reach a deal with Washington by August 1.

Fellow Southeast Asian countries Vietnam, the Philippines and Indonesia have each reached their own agreements, with the Trump administration placing a 20% tariff on Vietnamese exports, and 19% on Philippine and Indonesian goods entering the United States.

Malaysia’s Investment, Trade and Industry Minister Tengku Zafrul Aziz said several sticking points remained in the U.S. talks, particularly on non-trade barriers, but discussions were progressing well and on track to meet the August deadline.

“On balance, I think we can get to a number which we feel is fair for both parties,” he told a press conference.

Bloomberg reported on Tuesday, citing people familiar with the matter, that Malaysia was seeking a tariff of about 20%, which Tengku Zafrul denied.

“As low as possible… the target of 20% is not the target, the target is lower than that,” he said.

He said there were certain concessions Malaysia was unable to make as they may be detrimental to local industries, but the country was considering every demand that would help it complete the negotiations.

He did not elaborate on what the concessions would be.

Tengku Zafrul has previously said Malaysia was unwilling to cross certain “red lines” in the talks, referring to U.S. demands that he said encroached on domestic interests and national sovereignty.

(Reporting by Ashley Tang; Writing by Rozanna Latiff; Editing by David Stanway)