Jakarta. The United States will lower its import tariffs on Indonesian products from a planned 32 percent to 19 percent starting Aug. 1 under a new bilateral agreement reached between President Donald Trump and President Prabowo Subianto.

The move marks the lowest US tariff imposed on any ASEAN country under the Trump administration’s current trade framework, excluding Singapore, and is being hailed as a diplomatic win for Indonesia as it seeks to expand exports to the world’s largest economy.

“This 19 percent rate is among the lowest in ASEAN countries,” Trade Minister Budi Santoso told lawmakers during a parliamentary hearing in Jakarta’s Senayan complex on Wednesday.

Indonesia’s top exports to the US include palm oil, coffee, cocoa, textiles, and semiconductors. While the tariff cut is expected to boost shipments of these goods, Indonesia still faces challenges in diversifying its export base and reducing dependence on raw materials.

While acknowledging that the 19 percent tariff remains a burden for exporters, Redma Gita Wirawasta, chairman of the Indonesian Filament Yarn and Fiber Producers Association (Apsyfi), said Indonesia’s position is now much more favorable compared to its competitors. Vietnam and Bangladesh face higher tariffs of around 20 percent and 35 percent, respectively, giving Indonesia an edge in the US market.

Indonesian fisheries exporters are bracing for tighter margins as the United States ends years of zero-tariff access.

“For us, it’s not about the drop from 32 percent to 19 percent, but the jump from zero to 19 percent. Even with 10 percent, we’ve already struggled,” said Budhi Wibowo, chairman of the Indonesian Fisheries Processing and Marketing Entrepreneurs Association (AP5I), during an online briefing on Wednesday.

ASEAN Tariff Landscape
Vietnam secured the second-lowest tariff rate, at 20 percent, down from a planned 46 percent. However, transshipment goods through Vietnam will still face a 40 percent tariff. Vietnam remains the region’s largest exporter to the US, with a trade deficit of $123.5 billion.

Malaysia will see its tariff rise to 25 percent from 24 percent, while Thailand and Cambodia each face a 36 percent tariff despite prior reductions from 49 percent for Cambodia. The Philippines will pay a 20 percent tariff, up slightly from 17 percent, while Myanmar and Laos face the highest rates at 40 percent, down marginally from 44 percent and 48 percent, respectively.

Brunei will also see its tariff rise to 25 percent from 24 percent.

Singapore did not receive a tariff notification letter from President Trump on July 7, unlike many other countries. As of July 17, it maintains the lowest rate at 10 percent.