Source: Bisnis.com | July 16, 2025

The Association of Car and Motorcycle Equipment Industries (GIAMM) responded positively after the United States (US) government officially reduced the import tariff on products from Indonesia to 19%, from the previous 32%.

GIAMM Secretary General Rachmat Basuki said that exports of automotive industry components to the US will be worth US$1 billion throughout 2024, the second largest export value after Japan.

According to him, by lowering tariffs for Indonesia by 19%, the country’s component industry will be able to compete with other Southeast Asian countries. The reason is that the tariff for Indonesia is lower than for various other countries in the Asean region.

“We are only proposing to the relevant ministries that if possible, the tariff to the US is the lowest in Asean. From 32% to 19% is quite good, and it is possible that we will still be able to compete with other Asean countries,” said Basuki to Bisnis, Wednesday (16/7/2025).

He further said that the automotive components industry has exported to more than 100 countries. The largest are Japan, US, Malaysia and South Korea. Meanwhile the European Union, Middle East and Africa are relatively small.

“Apart from these countries, we are also promoting exports to Latin America and the Caribbean, where the market is also quite large, such as Brazil, Mexico and others,” he said.

As previously reported, this decision was announced directly by US President Donald Trump after reaching a bilateral agreement with Indonesia, following intensive negotiations between the two countries.

This tariff reduction occurred after Indonesian President Prabowo Subianto intervened directly in the negotiation process with Trump. The two are said to have established diplomatic communications to ease trade tensions which have strengthened in recent weeks.

Trump said that the results of these negotiations were beneficial for the US, because export goods from Uncle Sam’s country were not subject to tax by Indonesia.

“They pay 19% and we pay nothing. We will have full access to Indonesia,” Trump told reporters at the White House, citing Bloomberg, Wednesday (16/7/2025). Regionally, the 19% tariff on Indonesia is one of the lowest compared to other Asian countries. Products from Vietnam, for example, are now subject to a 20% tariff after previously reaching 46%. Malaysia, Japan and South Korea are each subject to a 25% tariff, while Thailand and Cambodia even have to pay up to 36%.