Malaysia Announces Reciprocal Trade Agreement with US No Longer in Effect

The Malaysian government has stated that its reciprocal trade agreement with the United States, formally known as the Agreement on Reciprocal Trade (ART), is no longer in effect. Minister of Investment, Trade and Industry Datuk Seri Johari Abdul Ghani made the announcement following the US Supreme Court’s decision to invalidate the tariff policies implemented by President Donald Trump.

With the Supreme Court’s annulment, Johari declared the agreement void. “This is not a suspension. The agreement is no longer valid — it is null and void by law. The US Supreme Court has decided that if tariffs are to be implemented, there must be justification,” he stated, according to Malaysian media outlet The Star on Tuesday, 17 March 2026.

The ART was officially signed on 26 October 2025 by Prime Minister Datuk Seri Anwar Ibrahim and Trump. The agreement was designed to promote fair treatment, protect Malaysian exports and employment, and stabilise trade relations between Malaysia and the United States.

However, Johari emphasised that going forward, any tariff measures undertaken by Washington must be based on specific reasons rather than applied uniformly. According to Johari, if the US claims action is warranted due to trade surpluses, they must specify the industrial sectors involved. “They cannot implement tariffs arbitrarily,” he said.

On 20 February, the US Supreme Court annulled the reciprocal tariff policy that had relied on the International Emergency Economic Powers Act (IEEPA). The ruling established that using this regulation for tariff determination was illegal.

The announcement of the agreement’s cancellation came only a day after President Prabowo Subianto and Donald Trump signed the ART. Following the Supreme Court decision, Trump announced the imposition of a flat 10 per cent tariff on all partner nations. A day later, he announced plans to increase the temporary tariff from 10 per cent to 15 per cent.