KUALA LUMPUR: The Federation of Malaysian Manufacturers (FMM) has urged the United States to adopt a balanced approach to its proposed Section 301 tariff action on goods from economies accused of lacking import bans on products made with forced labour.
FMM president Jacob Lee Chor Kok said the federation fully supports the objective of eliminating forced labour from global supply chains.
He said FMM has been in a consistent position, reflected in its ongoing engagement with members, government agencies and stakeholders on labour compliance, responsible business conduct and supply-chain due diligence.
“In a written submission to the Office of the United States Trade Representative (USTR), FMM stated that the proposed additional tariff should not be applied in a manner that penalises compliant manufacturers.
“It should not disrupt established trade and supply-chain relationships between Malaysia and the United States.
“Many Malaysian manufacturers exporting to the US already comply with stringent labour standards, including audits, supplier codes of conduct and product traceability obligations,” he said in a statement on Sunday (July 5)
Lee said the proposed additional duty could itself burden US commerce by increasing costs for US importers, manufacturers and consumers, as Malaysian suppliers play a key role in long-established and specialised supply chains.
He said based on feedback from members, the additional tariff costs could be passed on, affecting prices, product availability and delivery times.
“We also call on the USTR to retain existing Annex A tariff exclusions, particularly for electrical and electronics products, semiconductors and related product lines, as it is critical to global supply chains.
“Malaysian products that are already subject to Section 232 tariffs should not face overlapping duties under the proposed Section 301 action.
“We recommend that the USTR introduce an annual review mechanism to assess whether any tariffs imposed on Malaysian origin goods remain necessary.
“The establishment of the Inter-Agency Task Force on Forced Labour, announced by Investment, Trade and Industry Minister Datuk Seri Johari Abdul Ghani in Parliament on June 23, is evidence of the country’s ongoing reforms,” he said.
Lee said Malaysia has taken concrete steps over the years, including remediation measures following US Customs and Border Protection Withhold Release Orders, reforms to recruitment fee practices and amendments to labour laws.
He said the federation would continue engaging with the Malaysian government, the USTR and other stakeholders to support practical measures that eliminate forced labour while safeguarding legitimate trade, supply chain stability and the competitiveness of responsible manufacturers.
