Singapore and Malaysia respond as US imposes forced-labour tariffs on selected exports

One-third of Singapore's domestic exports to the US will face a new 12.5% tariff, while Malaysia will be subject to a lower 10% rate after US authorities took into consideration efforts to strengthen and enforce forced-labour import rules.

The United States (US) has imposed an additional 12.5% tariff on selected exports from economies around the world, including Singapore and Malaysia, following an investigation into countries' measures to prohibit the import of goods produced with forced labour.

According to the United States Trade Representative USTR, the investigation was launched in March 2026 under the direction of President Donald Trump and included public hearings, consultations with governments, and thousands of public comments. The US said the measures are intended to encourage trading partners to strengthen efforts against forced labour in global supply chains.

Singapore's response

According to a media statement by Singapore's Ministry of Trade and Industry (MTI), the Office of the USTR published its determination on 23 July 2026 after investigating 60 economies, including Singapore, under Section 301 of the Trade Act of 1974.

The investigation examined countries' acts, policies, and practices relating to the failure to impose and effectively enforce a prohibition on the importation of goods produced with forced labour. The USTR concluded that all 60 economies investigated had either failed to introduce such a prohibition or had not effectively enforced one.

As a result, the USTR has proposed an additional 12.5% ad valorem duty on Singapore's exports to the US.

Under the USTR's final determination, economies that already prohibit, or have committed to introducing, bans on imports made with forced labour face a 10% tariff. Other investigated economies, including Singapore, are subject to a 12.5% tariff.

According to MTI, approximately one-third of Singapore's domestic exports to the US will be subject to the tariff, which takes effect from 24 July 2026 at 12.01am (Eastern time).

Products already covered under Section 232 tariffs are exempt, alongside selected products including energy and energy products, pharmaceuticals and pharmaceutical ingredients, certain electronics, certain aerospace products, semiconductors, and metals used in currency and bullion.

The USTR said the exemptions are intended to avoid major supply chain disruptions, prevent shortages of critical materials, and encourage economies that have committed to strengthening forced labour import rules.

MTI said it will continue engaging the USTR to explore options on the matter. More details on how the tariff will be implemented will be shared when available.

The ministry also reiterated that forced labour undermines fair and open trade, adding that Singapore does not condone the use of forced labour.

It noted that Singapore has a comprehensive enforcement framework and a strong track record against such illegal practices within its borders. Singapore has also consistently supported efforts to strengthen international labour standards to address forced labour, having ratified the International Labour Organization (ILO) Forced Labour Convention, 1930 (C29) in October 1965.

At the same time, MTI said forced labour within complex, multi-tiered international supply chains is a transnational issue that requires international cooperation and is most effectively addressed at its source.

As a major trading hub, Singapore said any trade restriction, including a prohibition on goods produced with forced labour, must be carefully considered. The ministry added that it will continue doing so in close consultation with the Singapore Economic Resilience Taskforce and the business community.

Separately, MTI noted that Singapore is also among 16 economies under a separate USTR Section 301 investigation relating to structural excess capacity and production in manufacturing sectors. The findings and any proposed actions arising from that investigation have yet to be released.

The USTR said the latest action covers 60 trading partners representing about 99.4% of US imports, making it one of the broadest trade measures introduced under the Section 301 investigations.

Malaysia's response

In a statement on Malaysia's response, the Ministry of Investment, Trade and Industry (MITI) said the country will face a lower 10% tariff under the US Section 301 action related to forced labour, compared with the 12.5% rate imposed on most of the 60 economies investigated.

MITI said Malaysia is among 17 economies subject to the 10% rate, reflecting the USTR’s consideration of Malaysia’s commitments to implement and enforce laws prohibiting the importation of goods produced with forced labour.

The tariff will take effect at 12.01am US time on 24 July 2026, immediately after the expiry of the temporary tariff imposed under Section 122 of the Trade Act of 1974.

Malaysia is also among the 16 economies being investigated in a separate Section 301 probe concerning structural excess capacity in manufacturing sectors. MITI said the investigation remains ongoing and that it will update relevant stakeholders once the USTR determines any tariff rate or other action arising from the excess-capacity investigation.

Meanwhile, the Ministry said it will continue to engage with the US on both matters.

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