US Imposes New Tariffs on 60 Countries — Indonesia Gets 10%

On July 24, 2026, the United States formally replaced its temporary global tariff with a new, more legally durable tariff structure covering roughly 60 trading partners, including Indonesia. The move follows the expiration of a 150-day temporary 10% global tariff that Washington had put in place after the US Supreme Court struck down the administration's earlier "reciprocal tariff" policy, which had relied on emergency executive powers. This time, the legal basis is different — and so is the reasoning behind it.

What's Actually Different About This Tariff

Unlike the earlier reciprocal tariff policy, this new round is built on Section 301 of the Trade Act of 1974, following a US Trade Representative (USTR) investigation into forced labor practices in global supply chains. According to USTR, the investigation concluded that roughly 60 countries had failed to adequately prohibit the import of goods made with forced labor, and that this failure represented an unreasonable burden on US trade — the specific legal trigger required under Section 301. The US Trade Representative, Jamieson Greer, stated that decades of moral persuasion hadn't succeeded in removing forced labor from global supply chains, and that trade partners now needed to match the kind of enforcement the US itself has maintained for nearly a century.

Why Indonesia Landed in the Lower 10% Tier

The new tariff structure sorts countries into different bands based on how their forced labor import policies were assessed:

10% tariff: Applied to countries judged to already have forced labor import bans in place, that have committed to implementing one through a formal trade agreement, or that have at least partial policies preventing some forced labor-linked goods from entering. Indonesia falls into this group, alongside the UK, Malaysia, Mexico, Cambodia, Argentina, Bangladesh, Canada, India, and Pakistan.12.5% tariff: Applied to countries or territories judged not to have adequate forced labor import bans, or that haven't effectively enforced the ones they have.

China received no special treatment under this framework — its 12.5% tariff stacks on top of tariffs already in place, unlike the treatment given to close US allies.

What's Excluded From the New Tariff

The new tariff structure covers roughly 99.4% of total US import value, but several categories are specifically excluded:

Oil and gas products.Fertilizer.Certain food products.Goods already subject to sector-specific tariffs, such as steel and automobiles, to avoid double-counting tariffs on the same product category.Goods already in transit to the US before the policy took effect receive an exemption window through July 28, 2026.

Countries with existing formal trade agreements with the US, including provisions on forced labor enforcement, won't have tariffs pushed above levels already agreed in those deals.

What This Means for Indonesia's Economy

Relatively favorable positioning compared to the higher tier. Landing in the 10% group rather than the 12.5% group reflects Indonesia's existing legal measures against forced labor-linked imports being viewed favorably by USTR — a meaningful distinction for export competitiveness relative to countries facing the higher rate.Export competitiveness still faces some pressure. Even at the lower tier, a 10% tariff raises the cost of Indonesian goods entering the US market compared to a zero-tariff baseline, which can affect price competitiveness against exporters from countries with formal trade agreements that cap tariffs lower.Market uncertainty around the announcement contributed to recent volatility. This tariff news arrived alongside other global pressures — including a Middle East-driven oil price spike and a Wall Street tech selloff — that together weighed on the IHSG and broader emerging-market sentiment in the same week.The underlying policy rationale (forced labor enforcement) differs from a pure trade dispute. Because the legal basis is tied to labor practices rather than a bilateral trade imbalance, Indonesia's path to reducing or avoiding the tariff going forward likely runs through strengthening and demonstrating enforcement of its own forced labor import protections, rather than pure trade negotiation alone.

What to Watch Next

Whether Indonesia and the US formalize a trade agreement that could lock in the current 10% rate or push it lower, similar to arrangements already in place for some other trading partners.How exporters in labor-intensive sectors — including textiles, garments, and footwear, sectors already under pressure from this year's layoff wave — absorb or pass through the added cost.Rupiah and IHSG reaction over the following weeks, since tariff-driven uncertainty tends to affect currency and equity sentiment even when the direct economic impact takes longer to materialize.

Quick FAQ

Is this the same as the tariff Trump announced earlier this year? No — that was a temporary 10% global tariff based on emergency executive powers, which the US Supreme Court struck down and which expired after its 150-day window. This new tariff uses a different legal basis (Section 301) tied specifically to forced labor enforcement.

Could Indonesia's 10% tariff rate change in the future? Yes, potentially in either direction — through a formal trade agreement that locks in a lower rate, or through reassessment if USTR judges enforcement has weakened. The rate isn't necessarily permanent.

Which Indonesian industries are most exposed to this tariff? Labor-intensive export sectors selling into the US market, such as textiles, garments, and footwear, generally face the most direct exposure, since these categories are typically price-sensitive and don't fall under the sectoral exemptions like steel or automobiles.

Conclusion

The new US tariff structure replaces a temporary, legally shakier policy with one built on a different justification — forced labor enforcement — and Indonesia landed in the more favorable 10% tier rather than the 12.5% group. That's a meaningfully better outcome than it could have been, but it doesn't erase the underlying cost pressure on Indonesian exports to the US market. For now, the practical takeaway is to watch how trade negotiations and enforcement commitments develop in the coming months, since that — more than the initial tariff announcement itself — will likely determine the lasting impact on Indonesia's export sector.