Indonesian exports get a 10 per cent US tariff, with a much bigger one still possible

Washington has finished its forced labour investigation into Southeast Asia, and the bills are now set. Writing for Fulcrum, Jayant Menon of the ISEAS-Yusof Ishak Institute in Singapore lays the numbers side by side. Indonesian goods now pay a 10 per cent tariff under that case, the same as Malaysia, and below the 12.5 per cent charged to Vietnam, Thailand, the Philippines and Singapore. The case was brought under Section 301, an American trade law that lets the president punish a country for practices Washington judges unfair. Sitting at the bottom of the table is a small advantage, and it is not the figure exporters should watch most closely.

The bigger number comes from transhipment, the claim that Chinese goods pass through Southeast Asia, get new paperwork, and enter the United States as local products. Menon places Indonesia in Tier 2 there, meaning moderate exposure, with Vietnam rated high. Countries judged worse can face extra levies of 40 per cent or more, four times the tariff Indonesia is already paying. Two more American investigations are still open: one into industries accused of building too much capacity, and one under Section 232, the national security route, which Washington is trying to widen to critical minerals, robotics, medicines and aircraft. Nickel counts as a critical mineral, so that list reaches Indonesia's biggest industrial bet.

Menon expects firms to react at two speeds. In the short run they either raise their American prices or accept thinner profit, and the evidence so far is that most of the cost reaches US shoppers, which adds to inflation there. Over a longer stretch they move factories, find buyers outside America, and lean on regional deals. He points to Indonesia's new Comprehensive Economic Partnership Agreement with the European Union, and a second one with the United Arab Emirates, each a pact to cut tariffs and open trade between two sides. ASEAN's wider trade pact, RCEP, comes up for review in 2027.

Why it matters

If your factory or your employer sells to American buyers, the 10 per cent is already in the price being negotiated, and the gap with Vietnam at 12.5 per cent is a selling point worth using now. The Tier 2 label is the real risk, because moving to a worse tier would put a 40 per cent charge on the same goods and end most of those orders. Watch where the EU and UAE agreements actually start delivering customers, since that is the only part of this Indonesia controls.