KUALA LUMPUR (March 14): Malaysia could face trade action from the US if an investigation under Section 301 of US trade law finds that the country has violated international trade rules, Investment, Trade and Industry Minister Datuk Seri Johari Abdul Ghani said.

Johari said the US may invoke Section 122 of its Trade Act, which allows the imposition of temporary tariffs of up to 10%. However, such tariffs can only be applied for a limited period of about five months before further investigations are conducted.

The minister noted that the probe is not limited to Malaysia but covers nearly 60 countries that record trade surpluses with the US.

Under a Section 301 investigation, US authorities examine several areas, including possible export dumping, compliance with international labour standards, environmental protection practices, and the provision of government subsidies.

“One of the issues assessed is whether a country exports products to the US at prices significantly lower than in its domestic market, which could harm American industries,” Johari said in a statement on Saturday.

He added that companies exporting to the US must also comply with labour standards set by the International Labour Organization, including ensuring that forced labour is not used in production.

“This investigation does not target Malaysia alone but around 60 countries. As a nation trading with the US and exporting about RM233 billion annually to that market, we must ensure compliance,” he said.

Johari stressed that Malaysian firms exporting to the US must ensure they meet all relevant requirements.

On Friday, the minister said Malaysia would provide explanations to US authorities regarding allegations related to excess production capacity and forced labour, which are among the issues raised in the Section 301 investigation.

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