US Tariffs on Imports from Malaysia

Malaysia's tariff rate dropped from 24% (IEEPA) to 10% under Section 122 following the Feb 20, 2026 SCOTUS ruling — a 14-point reduction that strengthens its position as a semiconductor supply chain hub. US imports from Malaysia total approximately $46B annually, heavily concentrated in electronics and semiconductor-related products.

There is no bilateral FTA between the US and Malaysia, though Malaysia is a member of CPTPP, ASEAN, and RCEP. Malaysia is one of the world's largest exporters of semiconductors (primarily back-end assembly and testing), palm oil, and rubber gloves. The US-Malaysia trade relationship is driven by the electronics supply chain, with Intel, Broadcom, and other US firms operating major facilities in Penang and other Malaysian states.

Key Products Imported from Malaysia

Top imports include semiconductors and electronic components, electrical equipment, rubber gloves, palm oil, machinery, optical and scientific instruments, and liquefied natural gas. Malaysia is a key node in the global semiconductor supply chain, handling a significant share of the world's chip packaging and testing.

Recent Changes

Feb 20, 2026: SCOTUS struck down IEEPA tariffs 6-3 — Malaysia's rate dropped from 24% to 10% Section 122 (effective Feb 24, expires ~July 24, 2026). A 14-point reduction that significantly improves the economics of Malaysian exports. Section 232 steel and aluminum tariffs of 50% remain unchanged. Malaysia's semiconductor packaging and testing exports have grown as companies diversify supply chains. CPTPP membership signals trade openness, though the US is not a CPTPP member.

Tips for Importers

The 14-point tariff reduction makes Malaysian goods substantially more competitive. Semiconductors and most electronic components enter at 0% MFN duty, so the 10% Section 122 tariff is now the only layer — down from 24%. For rubber gloves and palm oil, the reduction from 24% to 10% meaningfully changes landed cost calculations. Malaysia's irreplaceable role in semiconductor packaging (Intel Penang, Broadcom, Infineon) means switching is impractical for many electronics importers. Plan for the Section 122 expiry (~July 24, 2026) — if it lapses without replacement, Malaysian goods would face only MFN rates. Explore whether Malaysia's CPTPP membership creates alternative supply chain routing advantages.