Jakarta. An upcoming 10% forced labor tariff by the United States on Indonesian goods would likely take effect after July 24, according to the government, as Washington seeks to avoid overlapping with the current import tax.

The US government recently unveiled a new 10% tariff on Indonesia following an investigation into how they curb imports allegedly produced by forced labor. The Donald Trump 2.0 administration is proposing a 12.5% levy for countries that have “failed to impose and effectively enforce” forced labor import prohibitions. Jakarta -- and several other countries -- receive a lower rate of 10% for having the rules in place but not adequately implementing them. 

This Section 301 probe -- coupled with the new tariff salvo -- had dominated the recent meeting between Indonesia’s senior economic minister Airlangga Hartarto and Trump’s trade chief Jamieson Greer. They were in Paris for a gathering related to the OECD -- the rich country club that Jakarta has been trying to join over the past few years. 

A press statement published by the Coordinating Ministry for Economic Affairs signaled the 10% levy would enter into force after July 24 or after the so-called “global tariffs” expire. After losing in court, the Trump administration introduced these 10% stopgap levies in February, but they would only be in effect for 150 days, or until July 24.

“This scheduling [for the forced labor levy] aims to avoid overlapping with the temporary 10% [global] tariffs. It is also to anticipate internal legal processes in the US to avoid legal uncertainty for businesses,” the statement reads.  

Jakarta also claimed that the US would “greenlight its 18 product exclusions proposal”, while saying that this would slash export costs if granted. The Jakarta Globe has reached out to the ministry on these exclusions.

In mid-April, Trade Minister Budi Santoso signed a regulation aimed at curbing imports linked to forced labor, about a month after Washington launched its probe. The US also took note of this regulation in its findings, but said Jakarta had not done any investigations or seizures.

Airlangga’s aide Haryo Limanseto had previously told the Globe that Jakarta would “engage in talks with the US government in a constructive manner” after the latest tariff announcement.

Indonesia is among the countries that have already shaken hands on a tariff deal with the US, which helped Jakarta get the reduced rate of 10%. Washington cited this deal in its Section 301 report, saying that Jakarta had made commitments to stop inflows of forced labor imports as part of the agreement.

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