Finance Minister Tengku Zafrul Aziz has issued a sharp rebuttal to former Prime Minister Tun Dr Mahathir Mohamad’s recent criticisms of Malaysia’s trade negotiations with the United States, accusing him of making false and misleading statements that risk distorting public understanding of the government’s economic strategy.
The exchange began when Dr Mahathir claimed the government appeared “happy” with a recent deal struck with Washington, suggesting that Malaysia had traded away far too much in exchange for a modest reduction in tariffs. The agreement saw the U.S. reduce its tariff on Malaysian exports from 25% to 19%—the same rate now enjoyed by Malaysia’s ASEAN peers.
Tengku Zafrul stressed that the deal was not about “being happy” but about averting an economic crisis. “This was responsible crisis management,” he said. “We were facing a 25% tariff that threatened over RM198 billion in exports and 100,000 jobs in the electrical and electronics sector alone. Securing the same 19% rate as our ASEAN neighbours was about protecting national interests and economic stability.”
Dr Mahathir further alleged that Malaysia had abolished “all taxes” on 11,000 U.S. products entering the country—claiming the government had given away 100% of its import tariff revenue for a tariff reduction of only 6%. Tengku Zafrul flatly rejected this as false.
“Only 60.4% of tariff lines are now duty-free, not 100%,” he said. “The difference between 60% and 100% is enormous. This was not about ‘giving up taxation’—it was about defending RM198 billion in exports, safeguarding jobs, and preventing wider economic fallout across markets.”
The Finance Minister also took issue with Dr Mahathir’s claim that Malaysia had agreed to supply rare earths to the United States, describing it as “completely untrue.” According to Tengku Zafrul, there is no agreement—verbal or written—to supply rare earth elements (REE) to the U.S. or any other country exclusively.
“In fact,” he explained, “Malaysia has imposed a ban on the export of raw rare earth materials since 1 January 2024. This Cabinet decision is subject to six-month reviews and strict monitoring. All rare earth must be processed domestically to maximise value for our economy and create jobs. We are building a full rare earth value chain—from mining to advanced manufacturing—with projections of contributing up to RM9.5 billion to GDP by 2025.”
The Minister pointed out that the policy had been communicated to all state governments and compliance was mandatory. “There is no question of exporting raw rare earth at 5% of its potential value. Our policy is to ensure domestic processing so that Malaysia earns many times more.”
Tengku Zafrul concluded by saying criticism of the government is welcome, but it must be based on facts. “It is not wrong to criticise,” he said, “but when that criticism is built on false claims, that is wrong. Let’s have debates grounded in truth, not misinformation.”
With tensions between Malaysia’s current leadership and its longest-serving former Prime Minister showing no signs of easing, this latest public clash underscores how economic policy is becoming a new battleground in their ongoing political rivalry.
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