The Indonesian government has confirmed that several export commodities including textiles and garments will be exempt from the new and anticipated US tariff policy.
Currently, Indonesian exports are subject to a temporary tariff of 10% and will be in effect until July 24, 2026, before being replaced by a new tariff structure currently being finalized by the US.
According to Minister for Economic Affairs, Airlangga Hartarto, the new US tariff policy will be structured in stages through several complementary components.
The first component deals with the issue of forced labour, which is imposed at 10%. Furthermore, the US plans to add another tariff component related to structural excess manufacturing capacity.
These two components will be combined with a number of exemption mechanisms for certain products where a mutual agreement has been reached.
Under this scheme, the total potential tariffs imposed on some Indonesian exports are estimated to reach 18%.
However, Airlangga Hartarto notes that Indonesian textile products have the potential to be exempt from additional tariffs related to structural overcapacity.
The process of determining tariff components related to structural excess capacity is expected to take place several weeks after the temporary tariff period ends on July 24, 2026.
Image courtesy: IARFC Indonesia
