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(Bloomberg) -- Malaysia is seeking to lower US tariffs threatened by President Donald Trump to less than 20% and is optimistic of reaching a deal ahead of the Aug. 1 deadline, according to Investment, Trade and Industry Minister Zafrul Aziz.

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Prime Minister Anwar Ibrahim will speak with Trump “when we complete the negotiations,” Zafrul told Bloomberg News. The US president has threatened a 25% levy — separate from sectoral tariffs — unless the Southeast Asian nation reaches an agreement with his administration.

“The direction is to get to as low as possible,” Zafrul told reporters. “I think we can get to a number which we feel is fair for both parties.”

Malaysia isn’t ready to close negotiations yet as it is still finalizing details with the US, Zafrul said.

The government is seeking to lower tariffs to about 20%, but is reluctant to meet certain demands around electric vehicles and foreign ownership, Bloomberg reported this week, citing people familiar with the matter.

So far, Malaysia has made progress addressing US concerns over the smuggling of high-performance semiconductors, but has resisted Washington’s demands for an extension of tax breaks on American electric vehicles, a reduction of foreign shareholding limits in the politically-sensitive power and financial sectors, and a cut in subsidies for local fisherman — a major vote bank, the people said.

The world’s largest economy ran a goods trade deficit with Malaysia of $24.8 billion last year, according to data from the Office of the US Trade Representative. The US was also the biggest foreign investor in the country in 2024.

The threat of steeper tariffs has weighed on Malaysia’s trade-reliant economy. The nation’s central bank cut interest rates this month by a quarter point to preemptively support the economy, warning that “the balance of risks to the growth outlook remains tilted to the downside.”