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View all search resultsIndonesia secures lower US tariffs in boost to labor-intensive industries
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(Courtesy of the Office of the Coordinating Economy Minister)
I
ndonesia has secured a new import tariff agreement with the United States, reducing the rate on selected products to 19 percent, down from the previous 32 percent. The breakthrough followed a series of high-level negotiations, culminating in direct talks between President Prabowo Subianto and US President Donald Trump.
This strategic reduction places Indonesia ahead of other countries in the region, making it the first to finalize such an agreement following Trump’s trade policy announcement on July 7. Negotiations began in April with a visit to Washington by Coordinating Economy Minister Airlangga Hartarto and his team, who met with US government officials.
The deal is seen as a significant win for Indonesia’s labor-intensive sectors, especially the garment and footwear industries, which face fierce competition in global markets. With lower tariffs, Indonesian exporters are expected to gain a more competitive edge in the US, Indonesia’s second-largest export destination after China.
Government officials say the agreement provides greater certainty for businesses, opens the door for increased job creation and could attract further industrial relocation and foreign investment into Indonesia. It also signals a continued effort by the government to protect domestic industries and avoid large-scale layoffs amid global economic pressures.
In addition to labor-intensive goods, the new agreement is expected to benefit key Indonesian export commodities such as palm oil. Officials describe the deal as both balanced and strategic, as it also supports US exports to Indonesia, such as agricultural products, machinery, energy goods and aircraft.
The government views the tariff deal as part of a broader effort to strengthen Indonesia’s role in global supply chains. President Prabowo has emphasized the importance of bolstering domestic industrial resilience as part of his national economic transformation agenda.
Indonesia remains committed to expanding market access through ongoing trade negotiations and international cooperation. Officials hope the combination of reduced tariffs and deeper global integration will not only strengthen the nation’s industrial competitiveness but also contribute to sustainable economic growth.
