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MALAYSIA is sharpening its trade strategy for the years ahead after achieving a historic milestone in 2025, when total trade reached a record RM3.06 trillion despite mounting global uncertainties and shifting trade dynamics.
Deputy Minister of Investment, Trade and Industry Sim Tze Tzin said the performance demonstrated Malaysia’s resilience and adaptability in navigating challenges such as reciprocal tariffs imposed by the United States and disruptions to global supply chains.
“As pointed out by Dato’ Seri Reezal, Chairman of MATRADE, 2025 was indeed an eventful year for Malaysia’s economy.
“Despite the trade challenges that threatened our exports, among others, the US reciprocal tariff, trade reached highest ever recorded value of RM3.06 trillion with exports amounting RM1.61 trillion and imports RM1.45 trillion, resulting in a surplus of RM151.80 billion,” he said.
Delivering a keynote address on behalf of the minister at the post-announcement of Malaysia’s 2025 trade performance in Kuala Lumpur, Sim said stronger exports were driven mainly by electrical and electronic products, particularly higher demand for electronic integrated circuits amid accelerating global adoption of advanced technologies, including artificial intelligence.
He said the manufacturing sector remained the main engine of export growth, supported by solid demand for palm oil-based products and continued expansion in machinery, equipment and parts. In the commodities segment, palm oil continued to be Malaysia’s key export.
Malaysia’s deeper integration into global technology supply chains also led to higher imports, mainly capital goods, as manufacturers expanded capacity to meet rising demand, he added.
Looking ahead, Sim said diversifying trade partnerships was critical to ensuring sustainable growth, reducing dependence on traditional markets and mitigating external risks.
“To ensure sustainable growth, Malaysia must diversify its trade partnerships. Broadening trade relations beyond traditional markets and forging stronger ties with emerging economies will reduce reliance on any single region, mitigating potential risks,” he said.
He highlighted emerging markets in Africa, the Middle East and Latin America as key growth areas, noting that MITI and its agencies had supported several official visits by Prime Minister Datuk Seri Anwar Ibrahim to countries including Ethiopia, South Africa, Kenya, the United Kingdom, Switzerland, Brazil, the United Arab Emirates, Russia and China to strengthen bilateral trade ties.
Sim said export promotion efforts would continue aggressively through MATRADE, alongside the pursuit of new trade agreements.
He noted that negotiations for a free trade agreement with South Korea had been concluded, covering goods, services, investment, customs facilitation, sanitary and phytosanitary measures, digital trade, the green economy, the bioeconomy and economic cooperation.
“We look forward to signing the Malaysia-Korea FTA by mid of this year,” he said.
He stressed that imports remained an essential component of trade growth, particularly the importation of high-value and specialised products not produced locally, such as advanced machinery, specialised equipment and critical raw materials.
These imports, he said, enable domestic industries to move up the value chain, improve productivity and produce higher-value exports while maintaining a sustainable trade balance.
Sim also touched on Malaysia’s role in the regional and global trade landscape, noting that shifting policies in major economies had reshaped trade flows and supply chains.
He said Malaysia’s position as a manufacturing and supply chain hub within Asean placed it in a strong position to benefit from trade diversion and increased foreign investment.
He added that Malaysia’s neutral foreign policy strengthened its trade relationships with all partners and helped cushion the impact of global trade uncertainty.
The country, he said, would continue supporting Asean’s Priority Economic Deliverables during the Philippines’ chairmanship this year.
Turning to domestic policy, Sim said the Thirteenth Malaysia Plan marked a significant shift in the country’s development approach under the Ekonomi MADANI framework, with a focus on transitioning towards a value creation-based economy while building resilience against global fragmentation.
“In line with the aspirations of RMK13, MITI and MATRADE will continue uplifting Malaysia’s trade through strategically planned promotion activities and export development programmes that benefit the business communities and the rakyat as a whole,” he said.
On the outlook for 2026, Sim cautioned against complacency despite record-breaking achievements, citing ongoing geopolitical risks and technological disruptions.
He said Malaysia’s competitiveness would be further strengthened through the digital economy, including cross-border e-commerce and digital platforms that expand market access, improve efficiency and foster innovation.
“To remain competitive in the current trade environment, we must emphasise industrial and skills upgrading, as well as competitiveness across all industries in order to assert greater influence in the global economy,” he said, adding that issues such as low wages, reliance on unskilled foreign labour and income inequality would need to be addressed across the ecosystem.
Sim said Malaysia’s economy was projected to grow between 4 per cent and 4.5 per cent in 2026, supported by resilient domestic demand, steady external trade, robust private consumption and tourism activity in conjunction with Visit Malaysia 2026.
The services and manufacturing sectors were expected to remain key growth drivers, complemented by construction and agriculture.
“Together, through strategic collaborations between the government, industries and other stakeholders, we will ensure Malaysia’s trade performance this year will continue to be a vibrant one,” he said.
He also expressed appreciation to Malaysia’s trading partners, business communities and small and medium enterprises for their contributions to the country’s record trade performance, and congratulated MATRADE’s leadership for its role in achieving the milestone.
“I am optimistic that 2026 will be another good year despite the trade winds that we anticipate,” he said. - January 27, 2026
