The United States has cautioned that some ASEAN countries may face higher tariffs if ongoing negotiations on trade fail to produce favourable outcomes.

US Trade Representative Jamieson Greer said discussions with several ASEAN nations were still in progress, emphasising that Washington preferred dialogue over punitive measures.

“What we are focused on now are the negotiations. We are not focused on putting out rounds of tariffs. That being said, if we are unable to reach agreements, then the tariff is the solution,” he told reporters after a bilateral meeting with Malaysia’s Investment, Trade and Industry Minister, Tengku Datuk Seri Zafrul Abdul Aziz, on Friday.

Greer added that the global semiconductor supply chain remains a sensitive issue. “We have to have the supply chain back in the US, but Southeast Asia is still an important source for semiconductors,” he said.

The warning comes amid heightened scrutiny of semiconductor exports under a US probe launched under Section 232 of the Trade Expansion Act 1962. While semiconductor products from Malaysia currently remain exempt from the 19 per cent reciprocal tariff imposed on August 8, the exemption could be overturned depending on the outcome of the investigation.

Semiconductors form a significant share of Malaysia’s exports to the US, amounting to MYR60.6 billion out of MYR120 billion worth of electrical and electronic (E&E) products shipped last year.

In August, the US imposed tariffs on several regional economies: 19 per cent on Cambodia, the Philippines, Indonesia and Thailand; 20 per cent on Vietnam; 25 per cent on Brunei; and 10 per cent on Singapore. Laos and Myanmar were the hardest hit, with tariffs set at 40 per cent.

Source: Borneo Bulletin

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