Jayanty Nada Shofa, Jakarta – A new 10% tariff on Indonesia following a forced labor probe will take effect on Friday before noon, as Washington's stopgap 10% levies will end in about an hour.

The Donald Trump 2.0 administration launched an unfair trade practice probe against Indonesia and dozens of other countries in March. The investigation zeroed in on whether they had failed to curb the import of goods made with forced labor. Trump's current 10% global tariffs will expire on Friday at around 11 a.m. Jakarta time, and the forced labor levy will come into effect at the exact same moment.

The US already unveiled its plans to slap a 10% forced-labor tariff for Jakarta last month. It had only made a final decision this week following public hearings and engagements with the affected governments.

"Today's action will begin to correct what is both a human rights abuse and a distortive trade practice to improve the welfare of workers everywhere," US Trade Representative Jamieson Greer said on Thursday local time.

Some exemptions are expected to be available for "certain" Indonesian products. A federal register notice shows that Washington is open to giving a "tariff-rate quota" for Indonesia related to textile trade, depending on US inputs such as cotton. Such quotas typically mean that lower tariffs may apply to a specified volume.

Close neighbor Malaysia also gets the same 10% rate. The levies go as high as 12.5% for Singapore and other investigated economies.

Indonesia has been living under tariff uncertainties since Trump's return to office.

It started with a 32% threatened levy, which later went down to 19% after a bilateral pact. A Supreme Court setback prompted Trump to introduce the current 10% temporary levies before launching probes as a way to keep the protectionist regime permanent. Jakarta is also facing a separate US probe on whether its manufacturing sector is producing goods beyond market demand.

The Jakarta Globe has reached out to the Coordinating Ministry for Economic Affairs, which has been leading the tariff negotiations, for comments.

US tariffs on ASEAN

The latest trade salvo against ASEAN members also came after US Secretary of State Marco Rubio's talks with the Southeast Asian grouping in Manila.

US Ambassador to ASEAN Kevin Kim has defended the latest tariff policies, saying what Washington seeks is "fair and reciprocal trade".

"For a meaningful and sustainable trade relationship to continue into the future, we have to address some of the imbalances that exist. Trade simply is one component of [our] relationship," Kim told a virtual presser on Friday.

Source: https://jakartaglobe.id/business/us-slaps-10-tariff-on-indonesia-over-forced-labo