SEOGWIPO, South Korea — Malaysia's Minister of Investment, Trade and Industry, Tengku Zafrul Aziz, expressed increased optimism about reaching a tariff reduction agreement with the United States following recent talks with his American counterpart. Tengku Zafrul met with U.S. Trade Representative Jamieson Greer during a two-day Asia-Pacific Economic Cooperation (APEC) ministerial meeting involving 21 member economies, held on South Korea’s Jeju Island. This marked their second meeting since Malaysia officially began negotiations with the U.S. two weeks ago.

“We’re making progress,” Zafrul told Reuters on the sidelines of the APEC gathering. He cited recent developments, including easing tensions between the U.S. and China in Geneva and a prior announcement involving the U.S. and the UK, as signs of positive momentum. He added that Malaysia was aiming for a mutually beneficial agreement and hoped for a resolution before the end of the 90-day negotiation pause declared by former President Trump.

While Zafrul refrained from disclosing specifics due to a non-disclosure agreement between the two nations, he confirmed that key sectors such as aerospace and semiconductors would be highlighted in discussions. Earlier this month, Malaysia’s prime minister indicated that tariff reductions might be possible, given Washington's willingness to engage in further talks after initial discussions.

Malaysia currently faces 24% U.S. tariffs—more than the Philippines (17%) but less than Indonesia (32%), Thailand (36%), and Vietnam (46%). Malaysia’s central bank recently warned of downside risks to the nation’s growth due to global trade uncertainties. Zafrul noted that the anticipated economic growth range of 4.5% to 5.5% could drop by 50 to 100 basis points as a result of the tariffs.