Malaysia to Clarify US Allegations on Excess Capacity and Labour Practices

Malaysia has announced it will respond to the United States over allegations of structural excess capacity, dumping risks, and forced labour practices, following Washington’s decision to investigate 60 economies under Section 301(b) of the US Trade Act of 1974 (Malay Mail).

The Ministry of Investment, Trade, and Industry (MITI) stressed that while Malaysia may have excess production capacity, this does not equate to dumping, as export prices remain comparable to domestic prices. Authorities also highlighted national labour laws, including minimum wage requirements and bans on underage employment, as safeguards against exploitation.

US Allegations

The US Trade Representative (USTR) launched the probe citing concerns that foreign producers may gain artificial cost advantages through forced labour, undermining American workers and businesses. Malaysia is among seven ASEAN countries under review, alongside Cambodia, Indonesia, the Philippines, Singapore, Thailand, and Vietnam.

Singapore’s Ministry of Trade and Industry (MTI) confirmed it will engage directly with USTR after being named in the investigation. The US alleges Singapore, like other economies, has not effectively enforced forced labour import prohibitions.

The investigations, which also involve major US trading partners such as Japan, South Korea, Canada, and Australia, highlight growing scrutiny of global trade practices and compliance with labour standards.

Business News