US Tariffs on Indonesian Goods Projected to Reach 18%

Indonesia’s exports to the US could soon face a combined tariff of 18%. This figure stems from two separate US probes into forced labor and structural excess manufacturing capacity. According to Susiwijono Moegiarso, an aide to Minister Airlangga Hartarto, these levies will phase in after the current global tariff expires on July 24.

Why is the US imposing a 10% forced labor tariff on Indonesia?

The US government isn’t just looking at whether forced labor exists; they’re looking at whether Jakarta actually stops it. While Indonesia introduced a new ministerial regulation to curb forced labor, the US claims the government hasn’t actually seized any “bad imports.”

Because of this lack of enforcement, Indonesia is slated for a 10% tariff. This is part of a broader Trump administration strategy targeting dozens of countries. While some face rates as high as 12.5%, Indonesia’s current projected rate for this specific probe is 10%.

What happens with the “structural excess capacity” probe?

The forced labor levy is only half the story. A second, more complex probe into structural excess manufacturing capacity is currently underway. If the US determines that Indonesia is overproducing goods beyond market demand—essentially “dumping” products into the US market—additional duties will be added.

Susiwijono Moegiarso told the Jakarta Globe that this second probe is what pushes the total projected tariff up to 18%. The US is expected to announce the findings and the exact size of these additional duties in the coming weeks.

This isn’t a random hike. It’s a targeted economic move. When a country has “excess capacity,” it often leads to lower global prices that can hurt US domestic manufacturers. By adding these duties, the US aims to level the playing field for its own factories.

Will the Indonesian textile industry be spared?

There is a glimmer of hope for one of Indonesia’s biggest export earners: textiles. During a meeting in Paris, US trade chief Jamieson Greer indicated that Washington might reduce tariffs for a specific volume of apparel and textile imports from certain economies.

Susiwijono claims the Trump government will grant a “special mechanism” for textiles. This suggests that while the general tariff wall goes up, the US recognizes the strategic importance of these goods or perhaps lacks a sufficient domestic supply to replace Indonesian textiles entirely.

How does the timeline for these tariffs work?

These tariffs won’t hit all at once. There is a phased rollout designed to transition from the current trade regime to the new “Trump 2.0” structure.

• Until July 24: The current 10% global tariff remains in place.
• After July 24: The global tariff expires, and the US begins adjusting the structure.
• Phase 1: The 10% forced labor levy is introduced.
• Phase 2: Additional duties from the excess capacity probe are added over the following weeks.

However, this timeline isn’t set in stone. Susiwijono noted that the final 18% rate is still subject to legal and administrative processes in the US, and Jakarta is still preparing for further hearings to contest or lower these figures.

The legal battle behind the tariff wall

This aggressive push for tariffs follows a significant legal setback for the US administration. In February, the Supreme Court declared some of Trump’s previously proposed double-digit levies illegal. This ruling effectively tore down part of his “tariff wall.”

The current probes into forced labor and excess capacity are, in many ways, a legal workaround. By basing tariffs on specific “unfair trade practices” rather than broad national security claims, the administration is attempting to build a more legally resilient barrier that can withstand judicial scrutiny.

For more on how global trade shifts affect Southeast Asia, check out our analysis on regional trade shifts.

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