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FRIDAY | JUNE 5, 2026

Johari clears air over US’s latest 10% tariff proposal

Ű BY HAYATUN RAZAK sunbiz@thesundaily.com

KUALA LUMPUR: The United States’ latest proposal to impose 10% tariff on Malaysian goods stems from gaps in the monitoring of forced labour risks across global supply chains, despite the country’s com pliance with international labour standards, Investment, Trade and Industry Minister Datuk Seri Johari Abdul Ghani said. Malaysia, he emphasised, does not practise forced labour and complies with international labour standards, including those under the International Labour Organization. However, he said, the country does not have a specific law to restrict the import of raw materials, feedstock or semi-finished products produced using forced labour, which has contributed to the issue under the US assessment. “When we import raw materials or semi-finished products from other countries, we do not have a mechanism to evaluate whether those inputs are linked to forced labour. That is the gap,” Johari told reporters at the American Malaysian Chamber of Commerce (AmCham Malaysia) 49th annual general meeting luncheon yesterday. On Tuesday, the Office of the US Trade Representative (USTR) pub lished its findings from investigations into alleged forced labour in Malaysia. Under Section 301 of the US Trade Act of 1974, the USTR is empowered to initiate investigations into trade related concerns across four key areas – forced labour, excess industrial capacity, state subsidies and environmental practices. Earlier this year, two separate investigations involving Malaysia were launched on March 11 and 12, Chamber of Commerce (AmCham Malaysia) member firms, must take full responsibility for eliminating forced labour from their supply chains amid scrutiny by the United States under Section 301 investigations and proposed tariffs linked to forced labour risks. AmCham CEO Datuk Siobhan Das said that accountability ultimately lies with businesses, which must be fully aware of what is happening across their supply chains. “You wouldn’t want to buy a product if you knew someone was being forced to work to produce it. As a consumer, if you wouldn’t buy that product, then companies must ensure they are checking their supply chains to make sure that is not the case,“ she told reporters on the sidelines of AmCham Malaysia’s 49th annual general meeting luncheon yesterday. Siobhan emphasised that forced labour is not confined to Malaysia but is a global issue affecting industries and supply chains across all geographies. “Every company, not just Malaysian, American, Japanese or Indian firms, but any company

o Exposure to new levy linked to supply chain blind spots, not alleged domestic forced labour

Siobhan said there is strong potential to expand cooperation, particularly by transferring advanced technologies to Malaysia while building a more skilled local workforce to support long-term growth. “We need to continue building, making sure that we are bringing the best technology we can, training Malaysians and incorporating them into the ecosystem so they become global players.” She highlighted that Malaysia’s strategy under the New Industrial Master Plan 2020 matches well with where American companies are investing and doing business. “All the industries Malaysia is supporting under NIMP are our shining stars. There is no mismatch; American companies are already in all of them. This is a good plan, and we are here to support it,“ Siobhan said. She added that Malaysia’s attrac tiveness lies in its strong funda mentals, including institutions and rule of law, which position it as one of the most competitive investment destinations in the region. “Malaysia has everything it needs to build. It’s up to Malaysians to choose to build and to believe that they can,“ Siobhan said. - by HAYATUN RAZAK Section 301 includes third-country exposure, where Malaysia may import inputs from other countries that could be linked to forced labour, even if such practices do not occur domestically. “But if someone else’s country has excess capacity or uses forced labour, and the product comes to us and we process it and export it to the US, that may be the issue.” Johari said Malaysia has presented and defended its position to the US against allegations of forced labour and excess capacity. “We have done our session. We presented and argued our case but, ultimately, it is up to them. The tariff process is unilateral and determined entirely by the US.” There are currently no pre liminary talks with Washington to accelerate the process, and Malaysia will wait for the US to complete its investigations and issue formal decisions, the minister said. Malaysia, Johari said, has no control over the timeline or the direction of the investigations, given that the process is unilateral and conducted by the US across multiple jurisdictions simul taneously. Turn to page 14

Johari clarified that the proposed tariff is separate from the current 10% levy under Section 122 and would only take effect after the temporary measure expires and upon formal notification by the US administration. He said the evaluation under

The US’s assessment under its latest Section 301 tariff framework extends beyond domestic practices to include upstream and third country supply chains, particularly where Malaysia lacks mechanisms to verify whether imported inputs are linked to forced labour.

focusing respectively on excess capacity and on gaps in addressing the importation of goods linked to forced labour content. Malaysia submitted its formal written response on April 15 and subsequently participated in a hearing before the USTR on May 12.

Johari (third, left) poses for a photo after delivering a keynote address at AmCham’s 49th annual general meeting luncheon yesterday. Also present are AmCham Malaysia chairman Datuk Timothy Tariq Garland (right) and its CEO Siobhan M.Das (second, left). – BERNAMAPIC

Companies must ensure clean supply chains: AmCham Malaysia CEO KUALA LUMPUR: All companies, including American Malaysian

in the global commercial landscape. It’s up to Malaysia to take that opportunity,“ she added. Siobhan said such global regulatory moves ultimately push companies and consumers to be more conscious. “Every country has a right to say it does not want to support industries linked to forced labour. At an individual level, it is the same decision, would you support it?”. She said the extent of the new trade measures’ impact on industries will be determined by how ethical, transparent, and well-managed their supply chains are. “If your industry and supply chain are clean, then the answer is no; it should not affect you. But if they are not, then the question is whether you should be in business at all.” While global conditions are becoming more difficult due to tariffs and geopolitical tensions, Malaysia and the US continue to maintain stable and resilient economic ties, Siobhan said. “As far as I’m concerned, the relationship and cooperation are in a good place. The outlook is very bright for Malaysia. There is a very strong relationship; we just have to continue building on what we have been doing for the past 50 years,“ she added.

including forced labour, excess capacity, state subsidies and environ mental practices. While acknowledging that tariffs and geopolitical tensions continue to pose challenges, Siobhan stressed that these are not unique to Malaysia but reflect broader global pressures affecting all economies. “This is not a Malaysian problem; it is a global problem. Everybody should be concerned and pay attention, but we should continue working towards a better future for Malaysia,“ she said. Malaysia’s strong export base and continued openness to global markets will be critical in sustaining growth amid these headwinds, she added. “Tariffs are tariffs; everyone in the world is facing them. What matters is that we continue producing quality products, remain innovative and stay open to investment from any country,“ Siobhan said. Malaysia remains well-positioned to capture opportunities arising from shifting global trade dynamics, regardless of whether demand comes from the United States or other markets, she said. “Malaysia is sitting on an opportunity to be a very strong player

anywhere, must be conscious and responsible for what is happening in its supply chain,“ she said. Siobhan said businesses must establish robust mechanisms to detect and prevent forced labour in their supply chains, ensuring their operations remain ethical and compliant with global standards. “As consumers, whether we are buying furniture, clothes or any product, we want to know how it is made. Supply chains are people, it’s simple. This is about human rights and human dignity.” Siobhan said while the issue may seem obvious, it requires active and continuous attention from both companies and consumers. “It should not just be a ‘no-brainer’. We need to think very actively about how products are made and how we respond to that. As consumers, we are the ultimate decision makers; we have the power.” She noted that increasing global regulations, including recent uni lateral measures by the United States, are prompting greater scrutiny of supply chains. Siobhan’s comments come as the US is reviewing Malaysia under its Section 301 trade investigation framework, which covers areas