PETALING JAYA: The government will introduce a New Investment Incentive Framework (NIIF) in the third quarter of 2025 to promote high-value investments and activities.
Deputy Investment, Trade and Industry Minister Liew Chin Tong said the NIIF is a major strategic step in response to the United States’ decision to impose a 19% countervailing tariff on Malaysian goods under an executive order announced on Aug 1.
“This is to ensure that all investments deliver benefits such as quality employment for Malaysians and the development of local company ecosystems and technologies,” he said in a written reply to Tanjung Piai MP Datuk Seri Dr Wee Jeck Seng in the Dewan Rakyat.
The framework, to be developed by Miti in collaboration with the Ministry of Finance, will set Malaysia in a new direction, aligning investment inflows with national development goals and long-term economic resilience.
Liew said the recent US tariff revision was a complex and time-sensitive issue that the government had successfully negotiated down to 19%.
“The government is confident that the early measures implemented, along with well-structured mitigation planning, will reduce the negative impact of the United States’ imposition of countervailing tariffs specifically on Malaysia,” the deputy minister noted.
Liew said Malaysia’s exports to the US made up 13.2% of the country’s total exports in 2024, valued at RM1.508 trillion.
To mitigate the tariff’s impact, Miti and its agency, Malaysia External Trade Development Corporation, have been actively exploring non-traditional export markets and strengthening networks in emerging regions such as Central Asia, South Asia, the Middle East, Africa, and Asean.
“To position Malaysia as an indispensable middle player in the supply chain, the government is committed to enhancing the nation’s resilience by advancing the growth of advanced local technology companies in strategic sectors such as semiconductors,” said Liew.
He called for a shift in mindset as local small and medium enterprises and micro-enterprises must be seen as potential global players, not just support units for foreign multinationals.
“The government is committed to leading the transformation of local companies from being mere outsourcing producers labelled ‘Made in Malaysia’ to reaching the level of ‘Made by Malaysia’ with Malaysian technology,” he said.
Liew pointed to the RM25 billion GEAR-uP programme under the Ministry of Finance as another key initiative to drive high-growth, high-value sectors, particularly semiconductors and the energy transition, while also empowering marginalised communities and nurturing local talent.
To support this transformation, the government will study the possibility of strengthening localisation requirements for foreign investors to ensure that MSMEs benefit from the spillover effects of both domestic and international investments.
The government believes these measures, especially the NIIF, will buffer Malaysia from future global trade shocks and elevate its status in global supply chains.
On Aug 1, the US enacted a revised reciprocal countervailing tariff of 19% on imports from Malaysia, under an executive order by President Donald Trump. The rate was negotiated down from an initially proposed 25% and superseded the 24% tariff announced earlier in April. The negotiations began in early May and concluded on July 31, allowing Malaysia to preserve key policy prerogatives without compromising its sovereign “red‑line” commitments.
Malaysia now shares the 19% tariff rate with several major Asean economies, including Thailand, Indonesia, the Philippines, and Cambodia, placing it firmly in the mid-tier bracket within the region. Vietnam faces a slightly higher rate of 20%, while Brunei is subject to 25%, and Laos and Myanmar face steep duties of 40% each. Singapore, by contrast, remains on a base rate of 10%.
Items currently excluded from the tariffs, such as semiconductors and pharmaceutical products, are also expected to face tariffs “in the next week or so”, according to Trump.