Jakarta, July 29, 2025 – The Europe Today: Indonesia’s labor-intensive industries, particularly the textile sector, have received a significant boost following a new tariff agreement with the United States that reduces import duties from 32 percent to 19 percent, an official announced.
Speaking at the Bisnis Indonesia Mid-Year Challenges 2025 forum on Tuesday, Secretary of the Coordinating Ministry for Economic Affairs, Susiwijono Moegiarso, said the revised tariff arrangement would help preserve approximately three million jobs in the Indonesian textile industry, which has been under increasing pressure due to global economic headwinds and previously high tariffs.
“This agreement came at the right moment, considering the seasonal dynamics of the textile sector,” Moegiarso said. “Without tariff certainty, producers in Indonesia would have faced serious challenges in retaining jobs while securing spring season orders. There was a real risk that orders would shift to competitor countries with more favorable tariff regimes, such as Vietnam.”
The tariff deal, finalized in July 2025 following high-level negotiations, places Indonesia among a select group of countries with competitive access to the US market, particularly in labor-intensive sectors. Moegiarso noted that this positioning would provide Indonesia with a stronger footing amid intensifying global competition.
The agreement was reached during talks between President Prabowo Subianto and US President Donald Trump. Under the terms, Indonesian exports to the United States will be subject to a reduced 19 percent tariff, while American goods entering Indonesia will be exempt from both tariff and non-tariff barriers.
As part of the broader deal, Indonesia has also committed to purchasing US$15 billion worth of US energy products, importing US$4.5 billion in agricultural goods, and acquiring 50 Boeing aircraft from the United States.
Negotiations are ongoing to further reduce US tariffs on several of Indonesia’s strategic export commodities, including coffee and cacao.
Government officials expressed optimism that this agreement will stimulate investment and sustain growth in sectors crucial to employment and national economic resilience.
