Liberation Day Tariff – An Open Letter To The US President

President Donald John Trump

The White House, 

1600 Pennsylvania Avenue, N.W.,  Washington, DC 20500.

United States of America                                           13^th July 2025

 

Mr President,

I hope this letter finds you well. I am writing with reference to your letter to my Prime Minister dated 7 July 2025, as a concerned ordinary citizen of Malaysia. It is a great honour for me to be writing to the president of a great nation with lots of investments in Malaysia.

As the number one market in the world and champions of free trade, I am indeed happy to see that you want to move forward to a balanced and fair trade. Hope it will also spread to other facets in this challenging world.

I am sorry to hear that the US have been facing very persistent trade deficits due to trade barriers and our relationship has been far from reciprocal. You have therefore, slapped a 25% tariff on all Malaysian products to the US, separate from all sectoral tariffs. You confirmed that it is far less than what is needed to eliminate the disparity. 

It seems that the deficit is a major threat to the US economy and national security.

I also read that you said, “For nations that treat us badly, we will calculate the combined rate of all their tariffs, non-monetary barriers and other forms of cheating”. It seems other countries rigged the rules of the game, cheat, steal, rob, plunder and used non-tariff barriers and costing America trillions of dollars and industries stolen. 

Mr President,

The above are serious allegations and can have severe consequences impacting reputation and legal standing. As a country that prioritises justice, I hope you can provide evidences of such. 

By the way, US also employ various means through regulations, standards and policies such as forced technology and intellectual property transfers, subsidies and complex and costly licensing and permitting fees. Not too long ago, Huawei’s operations were significantly restricted and the ban on sale and import of new communications equipment due to national security concerns.

The US has a big pool of highly influential and impactful economists, contributing significantly to the global economy. I also hope that they can work on a more meaningful formula to consider trade laws and norms to be a type of cheating instead of using some basic numbers and depending on how much of a trade imbalance (excluding services) a country has with the US. This actually distorts the real economic balance. Of the 10 countries with the highest announced tariff rates showed they are largely poor and small to buy much from the US. Instituting a minimum of 10% on every country is not really justice. 

As you are aware, manufacturing represents only 11% of US GDP. On the other hand, the services sector contributes nearly 80% and has consistently, for decades, contributed trade surplus. The services trade surplus against the world stood at nearly US$300 billion in 2024 (2023: US$278 billion). May I know why you have excluded services trade in your tariff calculation?

Mr President,

As I see it, foreign import barriers and exports subsidies are not the real reasons for the US trade deficit. It is the result of the saving and investment decisions of US households and businesses and also the unprecedented government budget deficits of recent years.

The US is lucky that the low savings rate has been supported by the sustained large foreign capital inflows. For more than three decades, US depended on foreigners who are willing to lend by purchasing US bonds, shares or investing in US real estate and other businesses.

Bear in mind, lenders will want to be repaid someday.

The US should also ask itself why you want others to follow the same labour and environmental standards thus increasing costs. In January 2026, for a second time, US will officially be out of the Paris Agreement.

Mr President,

Isn’t US at a crossroad because of earlier misadventures in decisionmaking? Increasing domestic savings to reduce trade deficit would leave Americans with less output to consume or invest to produce for future consumption. Experts estimated that reducing the US trade deficit by 1% of GDP requires export prices to fall by 10% or import prices to rise by 10%. Accusing others won’t alter that fact. The call to protect Americans from national security threats actually originates from these misadventures.  

Bilateral trade balances are generally determined not by trade and other government policies, but by specific patterns of trade by commodity. A nation’s ability to produce domestically is the bedrock of its national and economic security.

Mr President,

The US federal government has been running budget deficits since 1970 except between 1998 and 2001. The goods trade deficits have grown by over 40% in the last 5 years and a report details a 50.4% increase in the goods and services deficit during the first months of 2025. 

US needs an immediate and genuine rebalancing.

The defence budget increased 99% between 2000 to 2025. The baseline budget for 2025 including supplemental funding pushes the total to US$1.06 trillion. Is it necessary to spend so much to protect American interests? What exactly are the American interests and is there a clear policy after the collapse of the Soviet Union or it has been confused and adrift?

With an extraordinary economy, and champion of free trade, I assume you would drive forcefully for world peace. But US is the world’s largest arms exporter with a 43% share supplying to over 100 countries.

Would you think, apart from rebalancing, the US needs to do some soulsearching? 

What do we call the act by placing new tariffs on Canada and Mexico, reneging on the US-Mexico-Canada Agreement that was negotiated during your first term?

The US services trade encompass high-margin sectors. Tech giants generate billions in digital service revenues abroad – often untaxed, untracked, or underreported in bilateral trade statistics. None is properly counted when the US complains of being “cheated”. Yet Washington demands respect of intellectual property rights, open digital markets and comply with Western data governance standards. 

It is a skewed perception of imbalance by ignoring services and surely other countries might feel entitled to apply tariffs much higher than US “reciprocal” tariffs imposed on them. Make no mistake, no country is advocating a global trade war.

Wouldn’t unilaterally legitimising punitive tariffs, aggressive rhetoric that harm multilateral trade and the believe that US is in economic decline based on incomplete statistics weaken US’ credibility? 

Mr President,

From the start of your presidential term to June 30, the dollar has lost about 13% of its value against the Euro. It has significantly impacted the competitiveness of your biggest ally’s exports and they may diversify. This is also a signal of a loss of confidence among international investors.

We appreciate your offer for Malaysian companies to build or manufacture within US borders but was it not that US manufacturers applied ‘offshoring’ primarily to reduce costs, access new markets and avoid US taxes? 

I understand the challenges and pressures that Washington is facing and would humbly urge for you to rely more heavily on diplomacy. In desperate times, “necessity is the mother of invention”. To maintain leadership, US doesn’t need the limited economic benefits that arms sales provide, unnecessary foreign military aids and certainly you do not need the unnecessary headaches.

I sincerely look forward on the diplomacy initiative for the sake of global peace which can help reduce your trade disparity. We believe healthy friendships are built on mutual respect, honesty and support and we will surely not disappoint you.

What say you…

 

Most respectfully,

Saleh Mohammed