By Kimberley Kao and Ying Xian Wong
Tariffs have returned to the forefront of global trade tensions after the U.S. unveiled a plan for new levies, drawing sharp backlash from Asian trading partners.
The Trump administration has proposed new tariffs of at least 10% on numerous trading partners, citing their alleged failure to adequately address forced labor concerns. This move is the administration's latest attempt to replace levies that the Supreme Court struck down earlier this year.
The Office of the U.S. Trade Representative said late Tuesday that goods from more than a dozen economies, including Indonesia, Malaysia, and Taiwan would face a new, 10% duty after an investigation found they hadn't done enough to block imports of goods made from forced labor.
Other countries, including China, Japan, and India, would face a higher 12.5% rate because they don't prohibit such imports and haven't committed to do so through a deal with the Trump administration, the USTR said.
China slammed the move, saying trade issues should be resolved through talks and consultations.
"There is no such thing as 'forced labor' in China, and we oppose using it as a pretext for political manipulation," Foreign Ministry spokesperson Mao Ning said at a regular press briefing in Beijing on Wednesday.
"No one stands to gain from a tariff war or a trade war. Economic and trade issues should be worked out through dialogue and consultation on the basis of equality, respect and mutual benefit," the spokesperson said.
The new duties are based on a probe conducted under Section 301 of the Trade Act of 1974, which allows the U.S. to impose tariffs in response to allegedly unfair trading practices.
India said it remains in talks with the U.S. on the matter as a part of Section 301 proceedings. The country also added that negotiations to finalize the trade framework agreement announced earlier this year are continuing.
India has recently navigated a flurry of U.S. tariff policies. At one point, the country faced duties as high as 50% under the Trump administration before negotiations reduced the rate to 18% under an interim deal revealed in February.
Malaysia stated that the proposed 10% U.S. tariff linked to a forced-labor investigation hasn't been finalized and emphasized that the USTR's finding does not imply that Malaysia practices forced labor.
The finding reflects a gap in the country's import-screening framework for goods produced with forced labor in third countries and "is not a reflection of the labor conditions in Malaysia," the Ministry of Investment, Trade and Industry said Thursday.
Malaysia is working to resolve the issue and will continue consultations with U.S. authorities before a final decision, which is expected in late July, the ministry noted.
The ministry also rejected allegations of excess industrial capacity, asserting that the country "does not have excess industrial capacity that distorts or disrupts global markets". Detailed evidence on that matter has been submitted to the U.S., which has yet to release its findings on that investigation, the ministry added.
Australian Prime Minister Anthony Albanese, whose country faces a proposed 12.5% tariff rate, said the USTR proposal was issued without warning and pointed to an "ideological disagreement" with the U.S. on the use of tariffs.
"Any tariff on Australian exports to the United States are unjustified, they're inconsistent with our free trade agreement," Albanese told ABC radio on Thursday, according to a published transcript on the PM's office website.
South Korea's trade ministry labeled the proposed 12.5% tariff measure "inappropriate and unnecessary," highlighting efforts by its government and private sector to address such practices.
The government plans to submit further explanations of how it plans to eradicate forced labor by a July 6 deadline, and take part in a public hearing scheduled for July 7, the ministry said.
Jihye Lee contributed to this article
Write to Kimberley Kao at kimberley.kao@wsj.com and Ying Xian Wong at yingxian.wong@wsj.com
(END) Dow Jones Newswires
06-04-26 0238ET
