Why Indonesia Is Subject to 10% Reciprocal Tariff by the US
Indonesia was previously subject to a 19 percent tariff before it was dropped to 18 percent. Now, the country is subject to 10 percent US tariff.
Indonesia is currently facing a 10 percent reciprocal tariff due to the US Section 301 investigation into the country's forced labor practices. This information was confirmed by Trade Minister Budi Santoso on August 12. Prior to this, Indonesia was subject to a 19 percent tariff, which was later reduced to 18 percent. However, the decision was annulled by the Supreme Court, resulting in a 10 percent tariff for 150 days, which ended on July 24, 2026.
The Trump administration initiated the investigation due to concerns over forced labor and excess production. The US imposed two tariffs on the 60 countries involved: one of 12.5 percent and the other 10 percent. Indonesia was given a 10 percent tariff, which is lower than the 12.5 percent imposed on other countries. This is largely due to the existence of the Agreement on Reciprocal Trade (ART) between Indonesia and the US.
Budi emphasized that the previous 18 percent reciprocal tariff for Indonesia no longer applies, having been replaced by the new 10 percent tariff. Despite this, Budi highlighted the Indonesian government's efforts to further lower the tariff, with a zero percent tariff being the ultimate goal. He also noted that Indonesia has an advantageous position compared to other countries, such as Thailand, which is still in the process of negotiating an ART agreement with the US.
Written by urgent.news from Tempo.co English's reporting — not their text. Machine-written — may contain errors; check the original before relying on it.
