Asian economies are bracing for sweeping Section 301 trade probes by the United States that could pave the way for new tariffs on key export sectors, after the US Supreme Court ruled on Feb 20 that \u201creciprocal tariffs\u201d were illegal.<\/p>\n
Section 301 of the US Trade Act of 1974 allows the Office of the US Trade Representative, or USTR, to investigate and address unfair foreign trade practices. If violations are found, the US can impose tariffs or other trade restrictions to compel changes.<\/p>\n
Malaysian Investment, Trade and Industry Minister Johari Ghani said sectors potentially exposed to the probe include electrical and electronics, oil and gas, and plantation commodities such as palm oil.<\/p>\n
Johari said Malaysia\u2019s \u201creciprocal trade\u201d agreement with the US is now invalid, the New Straits Times reported on Sunday.<\/p>\n
\u201cThe US Supreme Court has ruled that if you want to impose tariffs, you must have reasons \u2026 if they claim it is due to trade surplus, they must specify the industry involved,\u201d he said, adding Washington cannot impose tariffs on a blanket basis.<\/p>\n
After the Supreme Court ruling, the White House introduced a new 10 percent tariff on all countries for 150 days on Feb 24, and last week launched two investigations under Section 301.<\/p>\n
The USTR announced on Wednesday that it was initiating a Section 301 probe into structural excess capacity and production in manufacturing sectors covering 16 trading partners.<\/p>\n
The economies subject to the investigation include China, the European Union, Norway, Singapore, Cambodia, Indonesia, Malaysia, Bangladesh, Mexico, Japan and India.<\/p>\n
Another such investigation was launched the following day targeting 60 economies over allegations related to forced labor.<\/p>\n
The move to initiate the probes represents a \u201cplan B\u201d for the US administration after the Supreme Court struck down the \u201creciprocal tariffs\u201d, Singapore\u2019s DBS Bank said in a research note.<\/p>\n
\u201cBy pivoting to Section 301, the USTR aims to establish a more durable legal basis for tariffs ahead of the July expiry of the temporary Section 122 global 10 percent tariff rate,\u201d the bank said.<\/p>\n
Singapore\u2019s Ministry of Trade and Industry said on Friday that the figures underpinning the Section 301 probe are incorrect.<\/p>\n
In the USTR\u2019s Federal Register Notice, Singapore was highlighted as having a bilateral trade surplus of $27 billion with the US in 2024. However, citing data from the US Bureau of Economic Analysis, the ministry said Singapore actually recorded a total trade deficit of about $27 billion with the US.<\/p>\n
The ministry said it has submitted the information to the USTR and would engage with the agency to further clarify the trade data.<\/p>\n
More resilience<\/strong><\/p>\n For smaller economies such as Cambodia, where nearly 40 percent of exports go to the US, the investigation underscores the need for a more resilient export strategy, Arnaud Darc, chairman and CEO of hospitality company Thalias, wrote in a commentary piece on Friday.<\/p>\n \u201cCambodia did not create the trade tensions now reshaping the global economy,\u201d said Darc, who also serves as co-chair of the Government-Private Sector Forum (Working Group D) of Cambodia. \u201cBut small economies rarely get to choose the moment their structural assumptions are tested.\u201d<\/p>\n In a statement published on Monday, Son Sol, spokeswoman for the minor progressive Jinbo Party in South Korea, condemned \u201cthe US\u2019 unilateral act of aggression that shatters international trade order\u201d.<\/p>\n The US, apart from using forced-labor probes to pressure 60 economies, is now targeting South Korea\u2019s key sectors \u2014 including automotive and semiconductor industries \u2014 through its \u201coverproduction\u201d investigation, Son said.<\/p>\n \u201cThe US emphasizes \u2018partnership\u2019 when it needs investment, but brandishes the sword of \u2018unfairness\u2019 the moment its domestic industries face disadvantages,\u201d she said, adding that Washington intends to use the investigation to force massive additional purchases and market opening.<\/p>\n On Thursday, South Korea\u2019s National Assembly passed a special bill for the country\u2019s $350 billion investment in the US, a pledge Seoul made last year in exchange for lower US tariffs.<\/p>\n Trade Minister Yeo Han-koo said the best way to stabilize the tariff situation is to fulfill the promised investment in the trade agreement.<\/p>","protected":false},"excerpt":{"rendered":" Asian economies are bracing for sweeping Section 301 trade probes by the United States that could pave the way for new tariffs on key export sectors, after the US Supreme Court ruled on Feb 20 that \u201creciprocal tariffs\u201d were illegal. Section 301 of the US Trade Act of 1974 allows the Office of the US […]<\/p>\n","protected":false},"author":0,"featured_media":0,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"jetpack_post_was_ever_published":false,"_jetpack_newsletter_access":"","_jetpack_dont_email_post_to_subs":false,"_jetpack_newsletter_tier_id":0,"footnotes":""},"categories":[1],"tags":[],"class_list":["post-134485","post","type-post","status-publish","format-standard","hentry","category-uncategorized","entry"],"jetpack_sharing_enabled":true,"jetpack_featured_media_url":"","jetpack-related-posts":[],"_links":{"self":[{"href":"https:\/\/chezaspin.com\/blog\/wp-json\/wp\/v2\/posts\/134485","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/chezaspin.com\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/chezaspin.com\/blog\/wp-json\/wp\/v2\/types\/post"}],"replies":[{"embeddable":true,"href":"https:\/\/chezaspin.com\/blog\/wp-json\/wp\/v2\/comments?post=134485"}],"version-history":[{"count":0,"href":"https:\/\/chezaspin.com\/blog\/wp-json\/wp\/v2\/posts\/134485\/revisions"}],"wp:attachment":[{"href":"https:\/\/chezaspin.com\/blog\/wp-json\/wp\/v2\/media?parent=134485"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/chezaspin.com\/blog\/wp-json\/wp\/v2\/categories?post=134485"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/chezaspin.com\/blog\/wp-json\/wp\/v2\/tags?post=134485"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}