Tariff reductions or strategic retreat? Malaysia’s Boeing deal raises alarming questions

Murray Hunter


Tariff reductions or strategic retreat? Malaysia’s Boeing deal raises alarming questions

P Ramasamy
Aug 02, 2025





Trade, Investment and Industry Minister Tengku Zafrul Aziz proudly claimed that Malaysia did not cross any “red lines” in negotiating the recent reduction of US tariffs—from 25 percent to 19 percent. Together with Prime Minister Anwar Ibrahim, he painted a picture of tough, principled bargaining that delivered results without compromising national interests.

However, this narrative quickly unraveled.

In the same breath, Zafrul admitted that one of the conditions for the tariff reduction was Malaysia’s agreement to purchase 30 Boeing aircraft, valued at US$9.5 billion, for the Malaysian Aviation Group (MAG). The order—placed as early as March this year—includes 18 Boeing 737-8 and 12 Boeing 737-10 planes.

It is not only Malaysia that has been pushed into such purchases. Other countries that received tariff relief from the US have reportedly made similar orders. Still, it is deeply troubling that Malaysia was effectively coerced into buying Boeing planes just to satisfy Washington’s terms.

Aircraft procurement should be driven by national interest and value for money. Whether from Boeing in the US or Airbus in France, Malaysia ought to have pursued an open tender process to ensure competitiveness and transparency. Instead, it appears that the deal was dictated more by geopolitics than by sound economics.

This situation raises a larger question: what other concessions did Malaysia make in return for the tariff reduction?

Anwar’s government has presented the tariff cut as a diplomatic victory. But the reality seems to be far more complex—and costly. There is no such thing as a free lunch with the US, especially under President Donald Trump’s aggressive “America First” trade policy. For Malaysia, the price of lower tariffs seems to have been the erosion of sovereign decision-making.

This kind of transactional diplomacy reflects a new form of economic imperialism—one where tariffs are wielded as instruments of coercion to secure purchases of American products. In this light, Zafrul’s claim that Malaysia did not cross any red lines rings hollow. Forcing a sovereign country to buy specific goods as a precondition for trade concessions is, by any standard, a breach of those red lines.

It is time for both Anwar and Zafrul to come clean. Malaysians deserve to know the full extent of the concessions made in this tariff deal. Transparency is essential if public confidence in the government’s foreign and trade policy is to be maintained.

The issue here is not merely about trade or tariffs—it is about whether countries like Malaysia can truly chart an independent path in global economic affairs. Or are we destined to dance to the tune of powerful nations, under the guise of diplomacy?

As a Tamil proverb puts it: there must be a reason why the rat runs naked. The question is whether has been exposed naked in the tariffs reduction deal with the US?

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DAP made a gross mistake in marginalising Prof. He's gonna be a perpetual thorn in the side of Madani