Indonesia Continues Lobbying US for More Competitive Section 301 Tariffs

The government is continuing consultations with the Office of the United States Trade Representative (USTR) to obtain more competitive tariffs after Indonesia was subjected to a 10 per cent levy under Section 301. The tariff imposition is a provisional outcome of a USTR investigation concerning prohibitions on goods made using forced labour. “The Indonesian Government notes the USTR’s recognition that Indonesia is one of the countries actively committed and possessing a regulatory framework to prevent and eradicate forced labour practices in the global supply chain,” said Coordinating Ministry for Economic Affairs Spokesperson Haryo Limanseto in Jakarta on Friday. Haryo explained that Indonesia also participated actively in the investigation, which covers two issues: excess capacity in the manufacturing sector and the prohibition of imports of goods produced using forced labour. This participation was carried out through the submission of written submissions, attendance at public hearings, and intergovernmental consultations. As is known, the USTR imposed tariffs based on the results of a Section 301 investigation of the Trade Act of 1974 against 60 countries and territories. Indonesia is among a group of 17 countries and territories subject to an additional tariff of 10 per cent, alongside Argentina, Bangladesh, Cambodia, Canada, Ecuador, El Salvador, Guatemala, Honduras, India, Jordan, Malaysia, Mexico, Pakistan, Sri Lanka, Trinidad and Tobago, and the United Kingdom. “We also note the USTR’s determination that several Indonesian products are included in the product exemptions list,” Haryo said. Haryo added that, based on the latest information from the US government, the results of the investigation related to the excess capacity issue will be announced in the near future. The government is awaiting the official announcement and hopes the applied tariff policy will be more favourable for Indonesia. Furthermore, the government hopes that Indonesian products which previously obtained tariff exemptions through the signing of the Agreement on Reciprocal Trade (ART) will be maintained. “The government is actively continuing consultations with the USTR to obtain the best and most competitive tariffs,” Haryo stated. To maintain national export competitiveness, the government is preparing two main measures. Domestically, the government will simplify regulations on raw material imports to reduce production costs, making Indonesian export products more competitive. On the market side, the government is optimising the implementation of various existing trade agreements, such as IA-CEPA, IK-CEPA, and RCEP, while expanding access to new markets through negotiations on I-EAEU FTA, IEU-CEPA, and ICA-CEPA as alternative export destinations beyond the US. It was previously reported that the US, starting Friday (24/7), imposed new tariffs of 10 per cent to 12.5 per cent on imported goods from 60 major trading partners, including China, Japan, and the European Union. The US government stated the policy was enacted because these countries were deemed insufficiently stringent in prohibiting imports of goods produced using forced labour. US Trade Representative Jamieson Greer said the US has enforced a ban on imports of forced labour goods for nearly a century and enforces it strictly. According to him, it is time for US trading partners to implement similar policies. According to the USTR, the countries targeted by the new tariffs account for approximately 99 per cent of total US imports. Meanwhile, the European Union, Taiwan, Japan, South Korea, and Switzerland are subject to tariffs that, when combined with existing most-favoured nation (MFN) rates, amount to 10 per cent or 12.5 per cent. Another 38 countries, including China, are subject to a 12.5 per cent tariff.