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INVESTMENT, Trade and Industry Minister Tengku Zafrul Abdul Aziz has dismissed ex-prime minister Tun Dr Mahathir Mohamad’s criticisms of Malaysia’s recent trade agreement with the United States, describing his claims as inaccurate and misleading.
Dr Mahathir had, in a statement on Thursday, criticised the government’s decision to accept a tariff reduction from 25 per cent to 19 per cent under what he characterised as a lopsided deal.
He further alleged that Malaysia had, in return, abolished all import duties on over 11,000 American products and agreed to supply rare earth elements (REE) to the US.
“The government seems delighted with a deal negotiated with Trump,” said Dr Mahathir. “Malaysia abolished all taxes on 11,000 US products, while the US only reduced tariffs by six per cent. This is not a good deal.”
He also argued that Malaysia should process rare earths domestically to extract high-value elements, claiming the returns could be up to 30 times higher than exporting raw materials.
“Why is Malaysia so foolish to accept just five per cent of the real value, when we could be earning so much more?” he asked.
Responding to the allegations, Tengku Zafrul said the government’s actions were based on responsible crisis management, aimed at protecting Malaysia’s economic interests—particularly the electrical and electronics (E&E) sector, which contributes over RM198 billion in exports and supports more than 100,000 jobs.
“This is not about being ‘delighted’, Tun—it’s about protecting the livelihoods of Malaysians,” said Zafrul in a Fcebook post. “We successfully secured the same 19 per cent tariff rate as other ASEAN partners, prioritising economic stability.”
He clarified that only 60.4 per cent of tariff lines were granted zero-duty status, refuting Dr Mahathir’s claim of a blanket 100 per cent exemption.
“100 per cent and 60 per cent are vastly different. That allegation is clearly untrue,” he stated.
On the issue of rare earth exports, Zafrul firmly denied that any agreement—verbal or written—had been made to supply REE to the US or any other country.
“The government has enforced an export ban on raw rare earth materials effective 1 January 2024, as decided by the Cabinet,” he said, reaffirming that REEs must be processed domestically to maximise their economic value.
He added that the rare earth industry is expected to contribute up to RM9.5 billion to GDP by the end of 2025, generating thousands of high-skilled jobs.
Zafrul added by urging Dr Mahathir to verify facts before making public statements.
“It’s not wrong to criticise, but when criticism is based on false accusations, that’s wrong!” he emphasised. - August 8, 2025
