Trump Launches Latest Trade War Salvo, Indonesia Likely to Be Hit Again

The United States government is poised to launch a new wave of import tariffs that could hit dozens of trading partners, including Indonesia, in the near future. The protectionist policy will be implemented as the current temporary global tariff expires this week.

According to Channel News Asia on Wednesday, US Trade Envoy Jamieson Greer said the administration of President Donald Trump has prepared a new tariff scheme specifically targeting around 60 trading partners, including Indonesia. The tariffs are being imposed on the grounds that these countries have failed to take decisive action in combating forced labour practices, while also forming part of Washington’s effort to rebuild its trade agenda after facing legal hurdles.

“We expect to see some action soon,” Greer said when asked about the exact timing of the new import duties.

Analysts estimate the new forced labour-based tariffs will be in the range of 10% to 12.5%, replacing the temporary 10% tariff that expires on Friday this week. The move signals the return of tariffs as an instrument of pressure against US trading partners, fuelling concerns about potential retaliation and renewed global trade tensions.

The latest policy follows Washington’s earlier announcement of a 25% tariff on Brazilian products and a 50% tariff on Canadian commodities, both set to take effect within 30 days. Responding to the measures, Canadian Prime Minister Mark Carney said his country was still considering various options. “We have also agreed to intensify discussions in the coming weeks to reach a deal,” Carney said.

Greer stressed that the new policy would cover the majority of US trade with other nations. “The US has laws prohibiting trade in goods made with forced labour. Most other countries do not have such laws, and those that do do not really enforce them,” he said regarding the rationale for tightening trade rules.

Under the prepared scheme, a 10% tariff will be imposed on goods from countries deemed to have taken steps to address forced labour, such as Canada, the European Union, Mexico, Taiwan, and the United Kingdom. Meanwhile, more than 40 other major economies, including China, India, and Japan, face a higher tariff of 12.5%. The European Union has previously asserted that imposing tariffs under the pretext of forced labour has no justifiable basis.

The planned 50% tariff on Canada comes amid a renegotiation of the US-Mexico-Canada Agreement. Washington has refused to extend the pact in its current form. Greer is scheduled to visit Mexico from Wednesday to Friday to discuss the USMCA review process. In contrast, negotiations between the US and Canada are progressing more slowly, and Prime Minister Carney has yet to signal a visit to Washington for direct talks.

Several trade law experts view the use of Section 338 of the Tariff Act of 1930 as Washington’s strategy to strengthen its bargaining position against Canada in the USMCA renegotiation. “It appears aimed at pushing for a deal between Canada and the United States, or as retaliation for failing to reach such a deal, or both,” explained trade lawyer Dave Townsend of Dorsey & Whitney regarding the motive behind the tariff hike. Townsend said the biggest question now is whether the two countries will enter a prolonged cycle of tariff escalation.

Another point of scrutiny is that the latest tariff policy provides no exemptions for Canadian products actually covered under the USMCA. The US government has denied that the tariffs on Canada are related to previous threats concerning wildfire smoke drifting into US territory.

Simultaneously, the US is preparing to impose a 25% tariff on various Brazilian products, citing unfair trade practices. The tariff is scheduled to take effect on Wednesday and is expected to become a significant political issue ahead of Brazil’s presidential election. Although certain commodities such as beef, coffee, specific aircraft parts, and goods not produced in the US are exempted, the impact is still expected to be substantial. The American Chamber of Commerce for Brazil warned that Washington’s policy would make Brazil one of the countries with the most restricted access to the US market, threatening export values estimated at more than US$11 billion, or approximately Rp198 trillion.