United States Section 301 Force Labour Tariffs on Malaysian Products (ITP/5/2026)

ITP/5/2026

July 24, 2026

Head Office, KL

July 24, 2026

To: CEOs / Managing Directors / Export Managers / Marketing Managers

UNITED STATES SECTION 301 FORCE LABOUR TARIFFS ON MALAYSIAN PRODUCTS

On July 23, 2026, the United States issued a Presidential Memorandum imposing tariffs under Section 301 of the Trade Act of 1974 on goods imported from 60 economies, including Malaysia.

The measure follows the expiry on July 23, 2026 of the temporary 10% import surcharge imposed under Section 122 of the Trade Act, which had applied since February 24, 2026.

10% Tariff on Malaysian Products

Effective July 24, 2026, most products originating from Malaysia are subject to an additional 10% ad valorem tariff when imported into the United States. The 10% tariff is imposed in addition to the normal Most Favoured Nation (MFN) customs duty and any other applicable duties. Malaysia is among the economies subject to the lower 10% rate, compared with the 12.5% rate imposed on many of the other economies covered by the action.

Products Exempted from the 10% Tariff

The Annex to the Presidential Memorandum provides two categories of exemptions from the additional 10% tariff applicable to Malaysian products. These comprise general exemptions available to all economies covered by the measure and separate exemptions for specified Malaysian products.

General Product Exemptions

The General Product Exemptions applies to all 60 economies covered by the measure, including Malaysia. These cover:

specified agricultural products, food products, minerals, chemicals and industrial raw materials
specified civil aircraft, engines, parts and components
specified pharmaceutical products and inputs used in pharmaceutical applications
products already subject to specified Section 232 measures, including certain steel, aluminium, copper, vehicles, wood products and semiconductor articles
goods already in transit within the prescribed period
humanitarian donations and informational materials

The complete HS code lists are provided under U.S. Note 52(b) to (f) in Part A of the Annex, PDF pages 16 to 26.

Malaysia Specific Exemptions

In addition to the general exemptions, the Annex provides a separate list of products originating from Malaysia that are exempt from the additional 10% tariff.

The main Malaysian products covered by the exemptions include:

crude and refined palm oil
palm kernel or babassu oil
castor oil
stearic acid and oleic acid
specified industrial fatty acids and fatty alcohols
coconut or copra oilcake
selected tropical wood and plywood products
bamboo, basketwork and plaiting products
natural cork and cork products
silk yarn and woven silk fabrics
natural pearls, diamonds and specified precious or semi-precious stones
orchids, selected flowers and ornamental plants
psyllium seed husks
Boswellia, also known as frankincense resin
argan oil

The complete Malaysia-specific list of exempted Harmonised Tariff Schedule of the United States (HTSUS) codes is as follows:

0106.19.91, 0106.20.00, 0106.90.01, 0410.10.00, 0602.90.20, 0603.13.00, 0603.14.00, 0603.19.01, 0604.20.00, 0604.90.10, 1401.10.00, 1511.10.00, 1511.90.00, 1513.29.00, 1515.30.00, 2102.20.60, 2306.50.00, 3823.11.00, 3823.12.00, 3823.19.20, 3823.70.40, 4403.41.00, 4409.22.05, 4409.22.10, 4409.22.25, 4409.22.40, 4409.22.50, 4409.22.60, 4409.22.65, 4409.22.90, 4412.31.06, 4412.31.26, 4412.31.42, 4412.31.45, 4412.31.48, 4412.31.52, 4412.31.61, 4412.31.92, 4412.41.00, 4412.51.10, 4412.51.31, 4412.51.41, 4412.51.51, 4412.91.06, 4412.91.10, 4412.91.31, 4412.91.41, 4412.91.51, 4501.10.00, 4501.90.20, 4501.90.40, 4502.00.00, 4503.10.20, 4503.10.30, 4503.10.40, 4503.10.60, 4503.90.20, 4503.90.40, 4503.90.60, 4504.10.10, 4504.10.20, 4504.10.30, 4504.10.40, 4504.10.45, 4504.10.47, 4504.10.50, 4504.90.00, 4601.22.40, 4601.22.80, 4601.22.90, 4601.29.40, 4601.93.01, 4601.93.05, 4601.93.20, 4602.12.05, 4602.12.14, 4602.12.16, 4602.12.23, 4602.12.25, 4602.12.35, 4602.12.45, 5004.00.00, 5005.00.00, 5006.00.10, 5006.00.90, 5007.10.30, 5007.10.60, 5007.20.00, 5007.90.30, 7101.10.30, 7101.10.60, 7102.10.00, 7102.31.00, 7102.39.00, 7103.10.20, 7103.10.40, 7103.91.00, 7103.99.10, 7103.99.50, 7205.10.00 and 8112.92.07.

The following products are also specifically exempted:

psyllium seed husks under HTSUS 1211.90.89
Boswellia under HTSUS 1301.90.91
argan oil under HTSUS 1515.90.81

The complete exclusions are contained in Part A of the Annex, with the Malaysia specific exclusions listed on page 28 of the PDF.

Goods Already in Transit

The tariff will not apply to goods that were loaded onto a vessel and already in transit before 12.01 a.m. United States Eastern Time on July 24, 2026, provided they are entered for consumption in the United States before 12.01 a.m. United States Eastern Time on July 28, 2026. Members with shipments already in transit should immediately check with their US importer or customs broker whether the goods qualify for this transitional exemption.

Textile and Apparel Products

The United States intends to introduce tariff-rate quotas for selected textile and apparel products from Malaysia, linked to Malaysia’s importation of US cotton and textile inputs. The quotas are not yet in operation. Until they are formally implemented, the 10% tariff will continue to apply to the relevant textile and apparel products. The United States has indicated that implementation may become feasible by September 1, 2026.

FMM’s Efforts

FMM submitted its comments to the United States Trade Representative on July 6, 2026 and requested, among other measures:

no blanket tariff on all Malaysian products
exclusions for manufacturers able to demonstrate compliance with international labour standards
product-specific exclusions
a company-level exclusion application process
a maximum tariff rate of 10%
regular review and eventual removal of the tariff once Malaysia implements an effective forced labour import prohibition

The final measure applies the lower 10% tariff rate to Malaysia and provides exemptions for a range of Malaysian products. It does not provide a company level exclusion mechanism for individual manufacturers.

Members exporting to the United States should confirm their product’s US HTSUS classification and exemption status with their US importer or customs broker and review the impact of the additional tariff on pricing and contractual arrangements.

For further information, please contact FMM Secretariat, Ms Nitasha Vikineswaran or the undersigned at tel: 03-62867200 or e-mail: IBDivision@fmm.org.my