The United States has imposed an additional 10 per cent tariff on almost all Malaysian exports, citing concerns over Malaysia’s failure to implement and enforce a ban on imports linked to forced labour.
The tariff came into effect at noon today following a Section 301 investigation launched by the US Trade Representative (USTR) in March, which examined forced labour import restrictions across 60 economies.
Apart from Malaysia, other countries affected by the 10 per cent tariff include Argentina, Bangladesh, Cambodia, Canada, Ecuador, El Salvador, Guatemala, Honduras, India, Indonesia, Jordan, Mexico, Pakistan, Sri Lanka, Trinidad and Tobago, and the United Kingdom.
Malaysia was placed under the lower tariff category of 10 per cent, compared with the 12.5 per cent rate imposed on most other economies, due to commitments related to forced labour import restrictions under its reciprocal trade agreement with the US.
However, Trade Minister Johari Ghani had previously stated in March that the commitment was no longer applicable.
According to the USTR announcement, several products will be exempted from the tariff, including crude and refined palm oil, gemstones, silk, psyllium seed husks, boswellia and argan oil.
Malaysia, along with Bangladesh, Cambodia and Indonesia, will also be included in a future tariff-rate quota system that could allow a certain volume of textile and apparel exports to enter the US market without duties.
In return, the mechanism would involve increased imports of US cotton, although USTR said the arrangement has yet to take effect and further details will be announced in a separate notice.
US Trade Representative Jamieson Greer said the tariff decision was made under the direction of President Donald Trump, arguing that years of diplomatic efforts had failed to remove forced labour from global supply chains.
He said the move was aimed at addressing both human rights concerns and trade practices that affect workers worldwide.
Greer added that the US has enforced a ban on forced labour-linked imports for almost a century and urged other trading partners to introduce and strengthen similar measures.
