Kota Kinabalu, Monday, 27 October 2025
The Agreement on Reciprocal Trade signed between Malaysia and the US yesterday does not uplift the Sabah economy because much of Sabah’s exports, such as wood products and cooper foil, to the US are already tariff exempted. Other Sabah exports to the US consist of mainly oil and gas, seafood and palm oil.
Sabah only 0.5% of Malaysian exports to US, much already tariff exempted
In any case, Sabah’s share of the direct bilateral trade between Malaysia and the US is only a meagre 0.5% of Malaysia’s trade with the US.
Sabah’s direct trade with the US is only 1% (RM1 billion out of RM100 billion of Sabah’s total trade) whereas Malaysia’s reported exports alone amount to RM183 billion.
As for opening up the US market to Malaysian palm oil, in fact, under the previous TPPA (Trans-Pacific Partnership Agreement) in 2018, palm oil was already granted market access to the US. The TPPA has since been replaced by subsequent bilateral trade arrangements.
Hence, it is no wonder that Sabah businesses don’t share the national euphoria over the so-called zero tariff on 1,711 Malaysian products to be enjoyed by Malaysia pharmaceutical, aerospace and other businesses.
In other words, the Malaysia-US trade agreement benefits big manufacturers in Peninsula Malaysia more than any economic sector in Sabah or Sarawak.
Federal government now stronger to pay up the 40% and past debts to Sabah
With the national euphoria over the huge trade benefits from the US for Malaysia, Sabahans can now expect that the federal government is in a much stronger financial position to honour its 40% revenue payments to Sabah without any further delay.
Towards the fulfillment of the constitutional duty to pay the 40% revenue payments, the Federal government should immediately announce that it will not appeal the High Court judgement and that it will comply with the 180 days to agree on the amounts to be paid back to Sabah, that is by mid-April 2026.
Datuk Yong Teck Lee
President, SAPP
Ex-Chief Minister May 1996 – May 1998