How does the new Section 301 tariff differ from the previous Section 122 tariff?

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The New Section 301 Tariff Extends Previous Measures Under a Different Rationale

The recently implemented Section 301 tariff on Malaysian goods continues the 10 per cent levy previously established under Section 122, but shifts the stated justification from a temporary measure following a Supreme Court ruling to allegations of forced labour within Malaysia's supply chain. This new tariff aims to perpetuate the temporary arrangement that was put in place after unilateral tariffs were nullified by the US Supreme Court.
Rationale Behind the Section 301 Tariff

The current Section 301 tariff is being applied due to alleged failures by Malaysia to eradicate forced labour in its supply chains. This contrasts with the preceding Section 122 tariff, which was a 150-day temporary measure enacted after the US Supreme Court invalidated earlier broad unilateral tariffs imposed by the Trump administration.
Continuity of the 10 Per Cent Levy

While the underlying reason for the tariffs has changed, the rate remains at 10 per cent, mirroring the Section 122 tariff. This continuation of the levy is intended to extend the temporary trade restriction, indicating a sustained approach to addressing concerns related to Malaysian exports, albeit under a new regulatory framework.
Previous Tariffs and the ART Agreement

The Section 122 tariff was introduced in February 2026, for a duration of 150 days, as a replacement for earlier, more extensive tariffs that were struck down. The new Section 301 tariff now seeks to prolong this temporary arrangement. Malaysia has denied the claims regarding forced labour, and Prime Minister Datuk Seri Anwar Ibrahim has indicated that negotiations will persist to reach a satisfactory resolution.
Exemptions and Potential Further Tariffs

While certain goods like oil and gas, fertilisers, aircraft and parts, critical minerals, and specific food items are reportedly exempted from the 10 per cent tariff, Malaysian palm oil exports, valued at approximately RM2 billion annually, may also be subjected to this levy. Investment, Trade and Industry Minister Datuk Seri Johari Abdul Ghani has stated that the US is also separately investigating Malaysia for excess industrial capacity, a probe that could lead to additional tariffs beyond the current measures.

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How does the new Section 301 tariff differ from the previous Section 122 tariff?

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