Malaysia says the U.S. has not yet reached a final tariff determination linked to forced labour allegations, according to the trade ministry

The U.S. Office of the U.S. Trade Representative (USTR) has proposed an additional 10% duty on imports from Malaysia, citing the country's alleged failure to impose and effectively enforce a prohibition on goods produced with forced labor. The USTR concluded that Malaysia's actions are unreasonable and burden U.S. commerce, making them actionable under Section 301.

Malaysia is among 54 countries identified for similar shortcomings, including China, India, Japan, and the UK. The U.S. has also cited six additional economies, including Canada and the European Union, for failing to effectively enforce existing prohibitions.

According to the Malaysian trade ministry, the U.S. has not yet reached a final tariff determination related to these allegations. The proposed tariffs are subject to public consultation, with written comments due by July 6 and hearings scheduled for July 7.

The USTR also highlighted that Malaysia is under investigation for excess production capacity in its electronics, machinery, and steel industries. Meanwhile, the U.S. and Malaysia had previously signed an Agreement on Reciprocal Trade in 2025, which included commitments to address forced labor and strengthen labor protections.

The U.S. has proposed a 12.5% additional duty for other economies and a textile mechanism to allow certain apparel and textile imports to enter the U.S. at a reduced tariff rate. The outcome of this process could have significant implications for bilateral trade relations and Malaysia's export sector.