Indonesia Confident in Responding to US Allegations on Forced Labour
The government is optimistic about responding to the allegations in the Section 301 investigation conducted by the United States against 16 economic zones, including Indonesia. In its investigation, the US cites two allegations: excess production capacity and issues related to the enforcement of the ban on importing goods produced with forced labour.
Spokesperson for the Coordinating Ministry for Economic Affairs, Haryo Limanseto, explained the basis for this confidence. “The government is optimistic because the structural excess capacity and forced labour attributed to several countries do not occur in Indonesia, and we have data or information to support this,” he told Tempo on Tuesday, 24 March 2026.
Furthermore, Haryo stated that these two allegations have actually been part of the discussions during negotiations for the reciprocal trade agreement, or Agreement on Reciprocal Trade, which has already been agreed upon.
Currently, a cross-ministerial and agency team along with industry associations have coordinated and will prepare responses through open public hearing sessions before 15 April 2026. There are also plans for government-to-government consultation sessions with the United States Trade Representative (USTR). “The date for the consultation session is being agreed upon jointly,” he said.
Section 301 under the Trade Act of 1974 is a regulation that authorises the United States Trade Representative (USTR) to investigate and impose sanctions on the governments of other countries deemed to engage in unfair trade practices against the US. This step was taken after the US Supreme Court invalidated the legal basis for the previously implemented reciprocal tariff policy.
Chairman of the Indonesian Employers Association (Apindo), Shinta Kamdani, stated that the context of the US Section 301 investigation is to examine allegations of excess production in Indonesia’s manufacturing sector, which is considered potentially distorting trade. As well as issues related to the enforcement of the ban on importing goods produced with forced labour.
In the USTR document, several sectors mentioned include steel, cement, electronics, solar modules, and others. “However, it is important to clarify further which sectors are specifically relevant to Indonesia, because for some of these sectors, Indonesia’s exports to the US are relatively small, even insignificant in some cases,” she said.
Thus, the potential direct impact needs to be viewed more carefully and based on actual trade data to avoid excessive generalisation. Amid this investigation, Indonesia has signed the ART, which is in the ratification process. Therefore, Shinta said, market access for a number of Indonesia’s major products subject to zero per cent preferential tariffs is expected to remain in place.
Key agricultural and industrial products such as palm oil, coffee, cocoa, spices, rubber, as well as textile and apparel products, in principle, can still enjoy zero per cent tariffs. “As long as the mechanisms and approvals from the respective authorities of each country are fulfilled,” she stated.