Jakarta. Indonesia stays confident in its ability to counter US accusations of unfair trade practices, but chooses not to make guesses on whether it will end up with higher tariffs.

Southeast Asia’s biggest economy is facing two separate US probes: one targeting alleged imports of goods made by forced labor, while the other zeroes in on structural excess capacity. Donald Trump's second term has given Jakarta until Wednesday (April 15) to submit explanations, a deadline that Indonesia is planning to follow. Jakarta is now drafting an official response, according to senior economic minister Airlangga Hartarto.

Airlangga — who is Indonesia's chief tariff negotiator — has been gathering inputs from government agencies and businesses to make a plausible explanation since the Section 301 probes rollout last month. To this day, Jakarta remains upbeat that it can convince the Trump government. 

“The US has asked us to submit a response before they make further investigation. All that matters is that we give a response,” Airlangga told reporters in Jakarta on Monday.

Earlier that day, Manpower Minister Yassierli said that Indonesia “never tolerated forced labor in its production system” in a comment on the inquiries. He went on to say Indonesia had done a “superb job” in ensuring human rights for workers.

In February, the US Supreme Court declared Trump did not have the power to slap his infamous reciprocal tariffs — a ruling made in less than 24 hours after Washington officially agreed to set a 19% duty on its Washington-bound goods. Trump has rallied against the court ruling by introducing temporary 10% global tariffs using a different law, despite plans to bump it up to 15%. The new tariffs will expire on July 24, unless extended by Congress. 

The spate of investigations could offer Trump an avenue to impose new tariff hikes on Indonesian goods if Jakarta is found guilty of the alleged unfair trade practices. Asked about this possibility, Airlangga only replied: “We don’t know. This is still an ongoing probe. We don’t want to make speculations.”

The US government blames Indonesia’s cement industry for having what it calls “persistent oversupply” by significantly producing more than the domestic market demands. Washington treats Indonesia’s persistent goods trade surplus — which totaled $56.15 billion as of November last year — as proof of this excess capacity. Indonesia still tries to keep its cool, with Airlangga saying that “Indonesia never exports cement to the US.” 

The US federal register notice also mentioned a 2024 list of countries that Washington accused of having used forced labor to produce its goods or inputs. Chinese cotton made to produce textiles is on that list. Indonesia has been grappling with an influx of low-cost Chinese textile imports.

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