How does Section 301 differ from Section 122 tariffs?

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Section 301 Tariffs Differ from Section 122 Tariffs in Their Justification and Scope

The Section 301 tariffs applied to Malaysian goods are distinct from the previously imposed Section 122 tariffs primarily in their stated rationale and the underlying legislation. While both fall under the Trade Act of 1974 and have resulted in a 10 per cent levy on Malaysian imports, Section 301 is being implemented due to alleged failures in eliminating forced labour within Malaysia's supply chain, whereas Section 122 was a temporary measure enacted after earlier unilateral tariffs were invalidated.
Section 301 Addresses Forced Labour Allegations

The recent application of tariffs under Section 301 stems from concerns regarding Malaysia's purported inability to eradicate forced labour practices in its production networks. This justification is a key differentiator from the previous tariff regime. Malaysia has formally denied these allegations, and Prime Minister Datuk Seri Anwar Ibrahim has indicated that ongoing negotiations aim to reach a mutually agreeable resolution.
Section 122 Was a Temporary Measure

In contrast, the Section 122 tariffs represented a short-term solution, remaining in effect for a period of 150 days. This measure was introduced following the US Supreme Court's decision to strike down earlier, broader unilateral tariffs that had been imposed by the Trump administration.
Both Tariffs Stem from the Trade Act of 1974

Despite their differing justifications, both the Section 301 and Section 122 tariffs are authorised under the provisions of the Trade Act of 1974. The current Section 301 tariffs appear to be an effort to extend the duration of the temporary arrangement previously established under Section 122, albeit with a new basis for imposition.
Potential for Additional Tariffs Exists

Beyond the Section 301 tariffs, Investment, Trade and Industry Minister Datuk Seri Johari Abdul Ghani has indicated that the US is also conducting a separate investigation into Malaysia concerning potential issues of excess industrial capacity. This ongoing probe could potentially lead to the imposition of further tariffs on Malaysian goods.

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How does Section 301 differ from Section 122 tariffs?

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