JAKARTA - The United States is preparing new tariffs against Malaysia and 59 other countries and economic regions because it is considered not to be firm enough in dealing with imports of goods related to forced labor. Indonesia is also mentioned, but in a different category.
Based on a Reuters report quoted by Malay Mail, Wednesday, June 3, the US Trade Representative Office or USTR proposed tariffs of 10 percent to 12.5 percent. This proposal is not final because it still has to go through a public comment period.
The USTR is a US government agency that handles foreign trade policy. In this case, the USTR assessed that a number of trading partners had not effectively prevented the entry of goods made with forced labor.
Malay Mail reported that the USTR said 54 countries and economic regions failed to implement and enforce a ban on the import of goods resulting from forced labor. The list includes Malaysia, China, Vietnam, Taiwan, and the United Kingdom.
Meanwhile, the other six parties, namely Canada, Ecuador, the European Union, Indonesia, Mexico, and Pakistan, were judged to have not effectively enforced the ban.
USTR Jamieson Greer said this condition is detrimental to American workers because they have to compete with products from unequal supply chains.
"The failure of our major trading partners to address the import of forced labor goods is unacceptable," Greer said.
"This situation makes American workers forced to compete in an unequal global arena," he said.
The draft tariff provides exemptions for a number of goods, such as beef, coffee, and some fruits and nuts.
Products from Canada and Mexico that meet the provisions of the North American free trade agreement will also be exempt. Some textile and clothing products are also included in the exemption.
This step comes after the US Supreme Court in February overturned part of President Donald Trump's tariff framework. The US government then sought a new path through a trade investigation based on Section 301.
Section 301 is a US trade law that allows the government to take action against other countries that are considered detrimental to American economic interests.
Beyond the issue of forced labor, the USTR is also investigating industrial overcapacity in a number of trading partner countries. This issue usually concerns excess production that can flood the global market with cheap goods.
A final decision has not been made. The USTR is still open to public input until July 6 before holding a hearing and deciding whether the tariffs will be imposed.
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