KUALA LUMPUR – The Agreement on Reciprocal Trade (ART) between Malaysia and the United States has been officially rendered null and void, Investment, Trade and Industry Minister Datuk Seri Johari Abdul Ghani confirmed.
Johari attributed the cancellation to a recent ruling by the US Supreme Court, which struck down the majority of broad tariff measures previously imposed by President Donald Trump.
“It is not on hold. It’s null and void. The US Supreme Court has ruled that if you want to impose tariffs, you must have reasons,” he said, as quoted by NST Online.
“If they claim it is due to a trade surplus, they must specify the industry involved. They cannot impose tariffs on a blanket basis.” Johari made the remarks after distributing Hari Raya Aidilfitri aid to his constituents.
The minister explained that the US is now relying on Section 122 of its Trade Act of 1974, which permits temporary tariffs, such as the 10 per cent levy announced by Trump. This interim measure may be followed by reviews under Section 301, which allows the US to investigate foreign acts, policies or practices considered discriminatory or burdensome to American commerce.
Johari highlighted potential areas of scrutiny, including dumping associated with excess capacity, alleged manufacturing abuses such as forced or underage labour, environmental violations, and export subsidies that distort competition.
Non-compliant companies could face export restrictions, while countries failing to address these practices may be subjected to higher tariffs.
Key Malaysian export sectors potentially affected include electrical and electronics, oil and gas, and plantation commodities such as palm oil, gloves and other rubber-based products. Johari noted Malaysia’s trade with the US remains substantial, with exports valued at around RM233 billion in 2025.
“The important thing is that what we do must not damage the environment, the country or the climate,” he said, emphasising adherence to labour and environmental standards amid US investigations.
Signed on Octobern26, 2025 during Trump’s visit to Kuala Lumpur for the Asean summit, the ART was designed to deepen Malaysia-US economic ties, reduce barriers, and align supply chain cooperation. Under the deal, tariffs on Malaysian goods had been maintained at 19 per cent, with 1,711 products enjoying zero tariffs.
However, the US Supreme Court ruling invalidated the tariff measures that formed the legal foundation of the agreement.
Johari noted that US investigations are not limited to Malaysia but extend to roughly 60 trading partners, including the European Union, under Section 301(b) concerning structural excess capacity in manufacturing.
During the initial phase of the trade tensions, Malaysia faced exposure to tariffs as high as 47 per cent, which was subsequently reduced to 24%. The ART had further lowered tariffs and provided zero-tariff privileges to selected Malaysian products across sectors such as electronics, rubber, and palm oil derivatives.
Trump has indicated plans to introduce a 15% global tariff to replace the levies nullified by the court, following an earlier announcement of a 10% tariff on all imports. – March 15, 2026