Not All Hit by Trump's 10% Tariff: 148 Indonesian Commodities Remain Exempt
The United States government has officially imposed an additional 10% tariff on products from Indonesia in the final results of a Section 301 investigation related to the prohibition of imports made with forced labour. However, a closer examination of the 431-page document reveals special treatment that sets Indonesia apart from many other nations. While the 10% tariff applies, Washington has also granted exemptions for hundreds of products, acknowledged Indonesia’s commitment through the Agreement on Reciprocal Trade (ART), and prepared a special tariff-rate quota (TRQ) scheme for textiles and cotton granted to only four countries. The document indicates that the policy’s primary goal is not merely to raise tariffs, but to encourage partner countries to strengthen bans on imports produced through forced labour.
Indonesia is included in the group of countries subject to the additional 10% tariff, but the U.S. Trade Representative (USTR) explicitly stated that Indonesia has made commitments through the ART regarding the prohibition of forced labour imports. Consequently, Indonesia was subjected to a 10% tariff rather than the 12.5% rate applied to many other countries. Crucially, the USTR ruling in Annex II Part L states that the additional duty shall not apply to a list of Indonesian products identified by their HS codes. These exempted commodities include many of Indonesia’s high-value exports, such as crude palm oil (CPO), processed palm oil, coconut oil, various vegetable oils, palm kernel meal, seaweed, medicinal plants, essential oils, tropical wood, plywood, rattan, wickerwork, cork, silk, pearls, and precious stones.
The document also provides specific exemptions for products like aloe, Tasmanian pepper, coconut, and centella, demonstrating that exceptions are made at the commodity level. Furthermore, the U.S. is establishing a Tariff-Rate Quota (TRQ) for textiles and apparel from Bangladesh, Cambodia, Indonesia, and Malaysia for an initial three-year period to encourage the use of U.S. textile and cotton inputs. Until the TRQ is implemented, textile and apparel imports from Indonesia remain subject to the 10% tariff. The exemptions are explicitly designed as a trade negotiation instrument to encourage Indonesia to fulfil its commitments and effectively enforce prohibitions on forced labour imports.