Malaysia dodges U.S. tariffs on chips and drugs, even as 19% rate kicks in
Malaysia’s semiconductor exports — which are a major pillar of its economy — will be exempt from U.S. tariffs, its trade minister Tengku Zafrul Aziz said Friday.
According to the country’s trade ministry, Malaysia is the sixth largest semiconductor exporter globally.
A number of semiconductor companies are operating in Malaysia, including Intel, Micron, AMD and Broadcom.
Besides semiconductors, the country’s pharmaceutical products will also be exempted from the duties, Zafrul added. Malaysia saw its tariff rate lowered to 19% from the 24% rate set earlier.
— Victor Loh
Asia-Pacific markets close lower
Asia-Pacific markets ended the day lower on Friday.
Hong Kong’s Hang Seng Index declined 1.07% to close at 24,507.81, while mainland China’s CSI 300 index decreased by 0.51% to 4,045.93.
Japan’s Nikkei 225 benchmark ended the day 0.66% lower at 40,799.60, while the broader Topix index ticked up 0.19% to 2,948.65.
Meanwhile, South Korea’s Kospi index retreated 3.88% to close at 3,119.41, while the small-cap Kosdaq plunged 4.03% to 772.79.
Australia’s S&P/ASX 200 benchmark fell 0.92% to end the day at 8,662.
Over in India, the 50-stock benchmark Nifty 50 was down 0.48%, while the BSE Sensex index lost 0.34% as of 2:02 p.m. Indian Standard Time (4:32 a.m. ET).
— Amala Balakrishner
Swiss government says pharmaceuticals will not be hit by tariffs
Much uncertainty remains over the extent to which the pharmaceutical sector will be affected by tariffs.
A spokesperson for the Swiss Federal Department of Economic Affairs told Reuters on Friday that the government understands that the 39% tariffs the country is facing are not set to include the pharmaceutical sector.
The White House did not immediately respond to CNBC’s request for comment.
Other countries, including South Africa, on Friday also flagged expected exceptions for the pharmaceutical sector.
— Sophie Kiderlin
Bank of Japan warns tariffs to have ‘large impact’ on businesses, households
The injection of wide-spanning tariffs is expected to impact global trade, with market uncertainty triggering a “large impact on business and household sentiment around the world and on global financial and capital markets,” the Bank of Japan said in its quarterly report out Aug. 1.
The Bank of Japan (BOJ) headquarters in Tokyo, Japan, on Thursday, Oct. 31, 2024. The Bank of Japan kept its benchmark interest rate unchanged.
Getty Images
The institution noted that Japan’s automakers have likely absorbed the cost hit from the U.S. levies, as reflected in a 20% drop in export prices for their vehicles since April.
“These developments suggest that while Japanese automakers have avoided a decrease in sales volume due to an increase in local prices, their profits are declining, taking the form of a deterioration in export profitability,” the bank said.
Japan secured a lower preferential tariff rate for its automobile sector as part of its trade agreement struck with the U.S. for a 15% levy.
— Ruxandra Iordache
South Africa expresses ‘concern’ over U.S. tariffs
South Africa’s President Cyril Ramaphosa at the Brics Summit 2025 at Museu de Arte Moderna on July 6, 2025, in Rio de Janeiro, Brazil.
Wagner Meier | Getty Images News | Getty Images
South African President Cyril Ramaphosa expressed “concern” over the White House’s updated tariffs that will impose a 30% duty on South African goods bound for the U.S.
Ramaphosa said his country will continue negotiations with Washington toward a trade deal, noting the government is finalizing a package to support companies, producers and workers affected by the levies.
“All applicable exceptions published in the previous US Executive Order are set to remain in force and these exceptions covered products such as copper, pharmaceuticals, semiconductors, lumber articles, certain critical minerals, stainless steel scrap and energy and energy products,” he said.
— Ruxandra Iordache
New U.S. tariffs ‘reflect the first results of the EU-US deal,’ EU trade chief says
Washington’s new tariffs regime — which also confirmed rates agreed in recent days with trading partners such as Japan and the EU — “reflect the first results of the EU-US deal, esp. the 15% all-inclusive tariff cap,” according to the 27-nation bloc’s trade chief.
“This reinforces stability for businesses as well as trust in the transatlantic economy. EU exporters now benefit from a more competitive position. The work continues,” Commissioner for Trade and Economic Security Maros Sefcovic said in a social media update.
The EU and White House carried out tumultuous negotiations in recent weeks, which ultimately resulted in a trade agreement on July 27.
— Ruxandra Iordache
As Trump pushes ahead with global trade war, analysts warn of further tariff fallout
U.S. President Donald Trump signed an executive order Thursday that modified “reciprocal” tariffs on dozens of countries, with experts warning more tariff hikes could be on the table.
“Of particular concern is the continued uncertainties [trading partners] will face with new sectoral tariffs coming and possibilities of additional tariffs if the Administration believes countries are not operating in good faith in their implementation efforts,” said Wendy Cutler, a former deputy U.S. trade representative.
“No doubt about it — the executive order and related agreements concluded over the past few months tears up the trade rule book that has governed international trade since WW2. Whether our partners can preserve it without the United states is an open question,” added Cutler, who is also a senior vice president of the Asia Society Policy Institute.
Stephen Olson, senior visiting fellow at ISEAS-Yusof Ishak Institute and a former U.S. trade negotiator, was of the same view: “Don’t assume this is the end of the story … more deals and further tariff increases are almost certain to follow.”
“Countries wishing to trade with the U.S. will now face dramatically higher tariffs that could be further increased at the whim of a president who has shown a disdain for trade rules and agreements, even those he himself has signed,” Olson added.
Read more about the latest tariff announcement here.
— Anniek Bao
Canada ‘disappointed’ by U.S. hiking tariffs, Prime Minister Mark Carney says
Canadian Prime Minister Mark Carney said the U.S. increasing tariffs to 35% on the country had “disappointed” its government. The duties have already come into effect and are the latest escalation in the months-long U.S.-Canada trade conflict.
“While we will continue to negotiate with the United States on our trading relationship, the Canadian government is laser focused on what we can control: building Canada strong,” he said in a statement.
While goods that are covered by the Canada-United States-Mexico agreement will not be affected by tariffs, Carney said.
Other sectors including lumber, steel, aluminium and autos would be “heavily impacted,” he added.
The prime minister also pushed back against the U.S. justifying higher tariffs with cross-border drug flows — an argument Trump has repeatedly made.
— Sophie Kiderlin
Mexico welcomes trade talks extension
Mexico welcomed news it was granted a 90-day reprieve on a U.S. boost to tariffs to 30% on many goods, to allow for further negotiations.
“We avoided the increase of tariffs announced for tomorrow and we prevailed with 90 days to build a large-scale agreement based on dialogue,” Mexican President Claudia Sheinbaum Pardo said in a social media update, according to a CNBC translation, citing a phone call with U.S. President Donald Trump.
— Ruxandra Iordache
Swiss government seeks ‘negotiated solution’ to new tariffs
Switzerland is assessing the new situation after it was hit with a new 39% tariff rate under U.S. President Donald Trump’s updated trade regime, the Federal Council said on the X social media platform.
“The Federal Council notes with great regret that, despite the progress made in bilateral talks and Switzerland’s very constructive stance from the outset, the US intends to impose unilateral additional tariffs on imports from Switzerland,” it noted.
The council added that it remains in contact with Washington and will continue pursuing a “negotiated solution.”
— Ruxandra Iordache
How Asian countries have reacted to Trump’s new, rejigged tariffs
In Asia, leaders from Taiwan, Cambodia and Japan have reacted to the new tariff rates from U.S. President Donald Trump, with some expressing optimism over lower levy rates.
Some governments, like those of Japan and Thailand, had also promised support to help businesses cope with the impact of the tariffs.
Australia, which received the lowest tariff of 10%, saw its trade minister reportedly hail this as a “vindication” for the government, adding that the country had conducted diplomacy with the U.S. in a “cool and calm” way.
Read more reactions to the Trump tariffs here.
— Lim Hui Jie, Sophie Kiderlin
New tariff regime
US President Donald Trump has updated tariff rates for a spate of countries, ramping up trade barriers with some of Washington’s closest trading allies.
Among those hit, Canada has been slapped with a 35%, while Switzerland’s rate is now 39%, while Taiwan faces a 20% duty. Trump had previously announced India would be hit with a 25% rate.
All of the newly unveiled tariff rates come into effect from Aug. 7.
Mexico has been granted a 90-day extension as negotiators continue trade talks.
— Michael Considine
