Trump Plans to Raise Tariffs to 15%, US Outlines Indonesia's Fate
Jakarta, CNBC Indonesia - The United States is planning to raise import tariffs for a number of countries from the current level of 10% to 15% or even higher. The US Trade Representative (USTR), Jamieson Greer, stated that this measure will be taken soon without specifying the list of specific trading partner countries that will be affected by the increase.
In the “Mornings with Maria” program on Fox Business Network on Wednesday local time, Greer revealed that the increase in tariffs will be adjusted to the trade profile of each country. He emphasized that this policy is a continuation of the protectionist trade policies that have been implemented by the current administration.
“Currently, we have a 10% tariff. That number will increase to 15% for some countries and then may be even higher for others, and I think that will be in line with the type of tariffs we have seen so far,” Greer said in the program, which was also quoted by Reuters.
Speaking later on Bloomberg TV, Greer added that the White House is preparing a proclamation to raise the temporary tariffs to 15% in sectors deemed appropriate. However, he stated that accommodations will be provided for countries that already have trade agreements with the US, although the details of this mechanism have not been explained further.
The US government also ensures that any tariff increases will follow the applicable legal process. This cautious step is taken to anticipate potential legal claims from parties with economic interests abroad.
“Whenever we set tariffs, we will face foreign interests that want to lower them. So, people will sue us,” said Greer.
On the other hand, Greer affirmed that the Trump administration does not intend to raise tariffs on Chinese goods above the current level. This decision was made in conjunction with President Trump’s planned visit to China in the coming weeks to maintain stability in trade relations between the two countries.
The US government is currently working to replace reciprocal tariffs based on the International Emergency Economic Powers Act (IEEPA) which was previously revoked by the Supreme Court, with new tariffs. This includes temporary tariffs based on Section 122 of the Trade Act of 1974 which came into effect on Tuesday at 10% and is claimed to remain compatible with existing trade agreements.
The main focus of the US government going forward is the investigation of unfair trade practices based on Section 301. This investigation will target countries that are building excessive industrial capacity, using forced labor, discriminating against US technology companies, or providing large subsidies to commodities such as rice and seafood.
Greer mentioned that he and Treasury Secretary Scott Bessent have repeatedly raised the issue of excessive industrial capacity with Chinese officials. He highlighted the large number of Chinese companies that are not profitable but continue to operate due to government subsidies.
“I don’t think they will fully solve that problem, and that is part of the reason why we need to impose tariffs on China, Vietnam, and other countries that have this problem,” he said.
Regarding concerns about an escalation of the trade war with Beijing, Greer assured that the US will remain committed to existing agreements. He affirmed that there is no desire from the White House to undermine the current trade truce through new, drastic tariff increases.
“We do not intend to escalate beyond the tariffs that currently exist. We are truly committed to sticking to the agreements we have with them,” said Greer.
The Fate of Indonesia?
Furthermore, Greer explained that Section 301 also functions as a law enforcement mechanism for newly agreed trade agreements, including with Indonesia. For information, Indonesia has previously agreed to accept US reciprocal tariffs of 19% and open its market to goods from the United States.
The USTR plans to launch a Section 301 investigation into Indonesian trade practices to examine industrial capacity and fisheries subsidies. The findings of this investigation will then be compared with the steps taken by Indonesia in fulfilling its commitments to US concerns.
“And then we will make a decision about what kind of tariffs to impose. We hope to have continuity in what we do with trade agreements,” he explained.
New Tariffs Again
In addition, Greer mentioned Section 338 of the Tariff Act of 1930 which allows for the imposition of tariffs of up to 50% on countries that discriminate in trade against the US. Although this old law is still in effect, the government’s main focus remains on Section 301, which is based on countries, and Section 232, which is based on national security.
Greer believes that the legal instruments used by the government currently have a strong basis and are difficult to break legally. The use of Section 301 and Section 232 is considered the most sustainable strategy in facing challenges in international and domestic courts.
“These instruments have been tested through legal oversight in the past and will be tested again now,” Greer concluded.
(tps/sef)