Johari says USTR's excess capacity claim may stem from third party imports

“KUALA LUMPUR, June 4 — The US Trade Representative’s (USTR) claim of excess capacity against Malaysia may have stemmed from imports from other countries, Datuk Seri Johari Abdul Ghani said today as Putrajaya insists Malaysian manufacturers are not overproducing to flood the American market. USTR had cited suspected forced-labour concerns and alleged excess capacity among Malaysian manufacturers as reasons for a proposed 10 per cent tariff on certain Malaysian exports. The tariff is expected to take effect after the current 10 per cent tariff imposed under Section 122 of the US Trade Act 1974 expires on July 24, although the Ministry of Investment, Trade and Industry (Miti) has said discussions are ongoing and no final decision has been made. “We don’t have excess capacity,” Johari told reporters after addressing executives from US companies at the American-Malaysian Chamber of Commerce annual general assembly luncheon here. “It could be that we import products that come from third parties with excess capacity, so that’s why.” Johari maintained that Malaysian manufacturers were not producing beyond market demand in an attempt to flood the US market. Excess capacity refers to a situation where businesses produce more goods than the market can absorb, sometimes allowing exporters to keep prices artificially low and gain a competitive advantage. MORE TO COME

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