Why does FMM oppose adding Section 301 duties to Section 232-covered goods?

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FMM Opposes Additional Section 301 Duties on Section 232-Covered Goods Due to Potential Penalties and Supply Chain Disruptions

The Federation of Malaysian Manufacturers (FMM) opposes the imposition of additional Section 301 duties on Malaysian products already subject to Section 232 tariffs. This stance is primarily driven by concerns that such blanket tariffs could unfairly penalise Malaysian manufacturers who already adhere to stringent labour standards and could lead to significant disruptions in established supply chains. The federation argues that these additional measures could ultimately increase costs for US businesses and consumers, impacting product pricing and availability.
Concerns Over Penalising Compliant Manufacturers

FMM has highlighted that many Malaysian manufacturers exporting to the United States already operate under strict labour compliance requirements mandated by their US customers. These requirements often include rigorous audits, adherence to supplier codes of conduct, and comprehensive traceability obligations. The federation's core argument is that applying additional Section 301 duties would disproportionately and unfairly penalise these compliant manufacturers, despite their adherence to international labour norms and customer-specific standards.
Risk of Increased Costs and Disrupted Supply Chains

The imposition of proposed additional duties poses a significant risk of increasing costs for US importers, manufacturers, and consumers. FMM's feedback from its members indicates that these added costs may be directly or partially passed on to US customers. This could lead to adverse effects on product pricing, reduce product availability, and cause delays in delivery times, thereby disrupting established and specialised supply chains where Malaysian suppliers play a crucial role.
Recommendation to Retain Annex A Exclusions

As part of its broader argument against additional burdens on critical trade flows, FMM specifically recommended that the US Trade Representative (USTR) retain existing Annex A exclusions. These exclusions are particularly important for sectors such as electrical and electronics products and semiconductors, which are described as critical components within global supply chains. By advocating for the retention of these exclusions, FMM aims to protect vital trade links that are already functioning under existing tariff structures.

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Why does FMM oppose adding Section 301 duties to Section 232-covered goods?

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