KUALA LUMPUR (April 11): Malaysia has proactively engaged with US authorities and companies, proposing a technology safeguard agreement to reassure stakeholders and ensure continued supply chain stability.

Investment, Trade and Industry Minister Tengku Datuk Seri Zafrul Abdul Aziz said Malaysia’s willingness to look at a technology safeguard agreement would provide reassurance to both the US government and American companies.

"One thing you have to bear in mind is that many companies that are in Malaysia and exporting to the US are also US companies.

"So, we are working closely with the US companies that will be affected if semiconductors are also on the list of tariffs that will be imposed," he said during his interview with CNBC on Friday morning.

He highlighted that 30% of Malaysia's exports to the US are semiconductors, while another 30% are electrical and electronics (E&E) products.

When asked whether the broader global tariff environment could impact Malaysia’s Industrial Master Plan, Zafrul acknowledged the potential downside.

"We are studying the impact because Malaysia is very much an open economy. As I said, we are a major exporter of semiconductors and E&E products. Therefore, based on our calculations, there will be a negative impact.

"Not just because of the tariff in the US, but also the tariff on China, as many US and multinational companies, including Malaysian firms involved in the supply chain, will be affected by a global economic slowdown. These companies export not just to the US,” he said.

On the feasibility of a US-China technology decoupling — particularly in artificial intelligence and chip manufacturing — Zafrul cautioned that such a bifurcation would inevitably drive up costs and disrupt supply chains.

"We are seeing that already happening over the last couple of years. But the problem is that costs will go up, and we have observed this trend.

"But with the tariffs imposed on China and on the rest of the world, I think the cost will go up further, and this will affect demand and consequently affect supply as well," he said.

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