The US has proposed reducing tariffs on Malaysian exports to a baseline of 10%, which is viewed positively by Malaysia's Investment, Trade and Industry Minister Zafrul Aziz. This reduction comes as Malaysia previously faced a 24% tariff rate, and the new proposal is seen as a compromise, albeit lower than the hoped-for zero tariff. The US-Malaysia trade relationship is significant, with a trade deficit of $24.8 billion reported last year, indicating the importance of this negotiation for Malaysian exporters.

The potential tariff reduction is expected to positively impact Malaysia's economy, particularly its export sector, which has been under pressure due to high tariffs. The 10% tariff is considered a floor and not negotiable, suggesting that while it is an improvement, it may not fully alleviate the challenges faced by Malaysian exporters. This development is part of broader trade negotiations in the region, as countries seek to navigate the complexities of US trade policies and maintain competitive positions in the global market.