Malaysia risks facing higher US baseline tariff as Washington concludes excess capacity investigation
KUALA LUMPUR: The United States’ 10 per cent baseline tariff on Malaysia’s products risks being reviewed if Washington finds that the country has excess industrial capacity, or is being used as a channel for products from countries with excess capacity.
The U.S. is considering reviewing its 10% baseline tariff on Malaysian products, according to an investigation into potential excess industrial capacity. Economists believe the U.S. could raise the tariff based on the outcome of the investigation, which could impact Malaysian exporters' competitiveness in the world's largest market.
The investigation is expected to conclude within three to four weeks, according to Johari Abdul Ghani, Malaysia's Investment, Trade and Industry Minister. The U.S. Trade Representative (USTR) is focusing on non-tariff barriers, such as excess capacity, state subsidies, cheap loans, low wages, and state-owned businesses that boost factory output.
Malaysian companies and GLCs have advantages like petrol and diesel subsidies compared to U.S. counterparts. Dr. Geoffrey Williams, an economist, stated that Malaysia should ensure the U.S. has clear and transparent data on the origin, value-added, and production processes of Malaysian exports.
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