The United States has imposed an additional 10% tariff on nearly all Malaysian exports, citing Malaysia’s failure to impose and effectively enforce a ban on imports linked to forced labour.
The tariff takes effect at noon today following a Section 301 investigation launched by the Office of the United States Trade Representative (USTR) in March. The investigation examined 60 economies over their restrictions on imports associated with forced labour.
Malaysia placed in lower tariff band
Malaysia was placed in the lower tariff band of 10%, compared with the 12.5% rate imposed on most other affected economies.
According to the USTR, the lower rate reflects Malaysia’s commitments under its reciprocal trade agreement with the United States relating to forced labour import prohibitions. However, those commitments were declared nullified by Investment, Trade and Industry Minister Johari Ghani in March.
Other economies subject to the 10% 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.
The USTR notice also stated that several products are exempt from the tariff, including crude and refined palm oil, gemstones, silk, psyllium seed husks, boswellia and argan oil.
Textile quota plan to be announced separately
Malaysia, together with Bangladesh, Cambodia and Indonesia, is also expected to be included in a future tariff-rate quota mechanism for textile and apparel products.
Under the proposed mechanism, a specified volume of textile and apparel products would be allowed to enter the United States duty-free in exchange for importing more US cotton. The USTR said the mechanism has not yet taken effect, with further details to be announced separately.
US Trade Representative Jamieson Greer said the tariff was introduced at the direction of President Donald Trump, arguing that decades of diplomatic efforts had failed to eliminate forced labour from global supply chains.
He said the move would begin addressing what the United States considers both a human rights abuse and a trade practice that distorts competition, while improving workers’ welfare.
Greer also said the United States has enforced a forced labour import ban for nearly a century and urged its trading partners to adopt and effectively enforce similar measures.
