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Based on the current dynamics of U.S. trade policy under Trump 2.0, Malaysia’s counterproposal of a 20% tariff might be partially acceptable but not guaranteed, because:
1. U.S. Negotiation Style under Trump
Trump’s administration often starts with maximum demands (e.g., 25% tariffs) to push for broader concessions (like EV tax breaks, foreign ownership liberalization, etc.).
A reduction to 20% could be viewed as a "win" for the U.S. if Malaysia offers something else in return, but Washington will expect meaningful concessions, not just a tariff cut.
2. U.S. Leverage on Semiconductors
The U.S. sees Malaysia as a critical hub for semiconductor packaging and AI chip exports.
Since Washington is focused on preventing AI chips from reaching China, Malaysia’s stricter export controls may give it some bargaining power.
However, the U.S. may still insist on longer-term commitments, especially regarding tech supply chain security.
3. U.S. EV Market Interests Are Limited
U.S. automakers (like Tesla) have a very small EV presence in Malaysia, so Trump’s push for EV tax breaks is less about Malaysia’s domestic market and more about setting a precedent for U.S. goods.
Malaysia’s refusal to extend EV tax breaks might not be a dealbreaker for the U.S., especially since the U.S. itself is ending its EV tax credit soon.
4. Politically Sensitive Demands
Demands on fisheries subsidies and foreign ownership in financial/power sectors are domestic red lines for Malaysia.
The U.S. may soften its stance if semiconductor controls and tariff levels are settled because semiconductors are a priority.
5. Regional Benchmark
Vietnam accepted a 20% tariff deal in July 2025 (although with some friction).
If the U.S. agreed to 20% with Vietnam, accepting a similar deal with Malaysia is plausible, as long as the U.S. doesn’t perceive Malaysia as "too resistant" to other demands.