Malaysia imposes trade permits for US-linked AI chip shipments
Latest move comes with Kuala Lumpur facing 25 per cent tariffs announced by US leader Donald Trump
Malaysia will require trade permits for all high-performance chips meant for artificial intelligence (AI) and sourced from the United States, as Kuala Lumpur scrambles to negotiate down punitive American tariffs set to kick in on August 1.
Last week, US President Donald Trump slapped a 25 per cent tariff on Malaysia, part of a broader move by the mercurial leader to address what he described as “unsustainable trade deficits” that the world’s largest economy faces with its trade partners.
Trump’s announcement came just weeks after Malaysia affirmed that it “stands firm” against attempts to circumvent US export controls on chips to American rival China, following allegations that Chinese engineers had rented data centres packed with high-end Nvidia chips to train their AI model in the Southeast Asian country.
On Monday, Malaysia’s Ministry of Investment, Trade and Industry (MITI) said all exports, transshipments and transits of high-performance AI chips of US origin would need to come with a Strategic Trade Permit “effective immediately”.
The new regulation will require individuals or companies to notify Malaysian authorities at least 30 days before moving any items not expressly listed in the Strategic Items List (SIL) – which covers items such as goods and technology that could potentially be used for military applications.
“This initiative serves to close regulatory gaps while Malaysia undertakes further review on the inclusion of high performance AI chips of US origin into the SIL,” the ministry said in a statement.
The mandatory permit is the latest measure taken by Kuala Lumpur, which caved to pressure from Washington in March to tighten regulations on semiconductor shipments following reports that advanced Nvidia chips had been shipped to China from Singapore via Malaysia.
Last month, Malaysia’s trade authorities launched an investigation into claims that four Chinese engineers had allegedly flown into Malaysia from Beijing in March to train an AI model in data centres housing similar chips that China has been barred access by the US.
Each engineer had reportedly carried a suitcase with hard drives containing 80 terabytes’ worth of spreadsheets, images and video clips that were fed into 300 servers operating on Nvidia chips to build their AI model before bringing back the data to China, according to a report by The Wall Street Journal.
MITI on Monday said it would take “strict legal action” against any attempt by any individual or company to skirt export controls or engage in illicit trade activities.
The ministry added that all entities operating in Malaysia must comply with the “relevant international obligations to avoid any secondary sanctions on their businesses”.
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“MITI remains committed to preserving a safe, secure, transparent and rules-based trading environment with all its trade partners, and will not tolerate the misuse of Malaysia’s jurisdiction for illicit trading activities,” the ministry said.
In a batch of letters sent out last Tuesday, Trump announced tariffs of 40 per cent on exports by Myanmar and Laos, 36 per cent on Cambodia and Thailand, 32 per cent on Indonesia and 25 per cent on Malaysia.
Two days later, he sent similar letters for tariffs of 25 per cent on Brunei and 20 per cent on the Philippines.
The latest salvoes have triggered widespread anxiety among Southeast Asia’s economies, most of which are reliant on US demand and whose industries are deeply intertwined with American supply chains.
