Indonesian textile and garment sector is bracing for a major blow. US President Donald Trump has announced a sweeping 32% import tariff on all Indonesian products entering the United States. The policy, detailed in a letter sent to President Prabowo Subianto on July 7, 2025, will take effect starting August 1, 2025.
What makes this move even more painful is that the new tariff stands apart from existing sectoral tariffs. This could drive the total import duty burden on Indonesian yarn exports to around 57%, and on garment exports up to 60%.
Chairman of the Indonesian Filament Yarn and Fiber Producers Association (APSyFI) Redma Gita Wiraswasta openly admitted the announcement left him stunned.
“I’m just weak right now, need to think this through (about 32% import tariff). I’m speechless. Export is tough, domestic market is tough. Even when our anti-dumping duty request was rejected, imported yarns kept flooding in, and other products too,” Redma told CNBC Indonesia on Thursday (10/7/2025).
He estimates Indonesia’s exports to the US could drop by at least 50%. “Our exports to the US will drop by at least 50%. Because our tariff to the US for yarn is 5% (MFN), plus a 10% base tariff, plus 13% anti-dumping duty, and then add this new 32% tariff. For garments, the MFN rate is even higher at 15%,” he explained.
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Redma also pointed out that the impact won’t be the same for all products. Yarn may manage slightly better, but downstream products like garments are far more vulnerable. “The garment industry is labor-intensive but capital-vulnerable, so this new tariff will hit downstream producers the hardest,” he noted.
He further disagreed with Minister of Industry Agus Gumiwang Kartasasmita, who recently said Indonesia’s textile competitiveness is still stronger than Bangladesh’s. According to Redma, the real risk lies in how international buyers might react.
Redma warned the worst-case scenario could see overseas buyers abruptly cancel or scale back orders starting from August 1, 2025, once the tariff comes into force. “Export is already tough, domestic demand is flooded with imports. Now, buyers could decide not to order or reduce orders as soon as the new tariff kicks in,” he cautioned.
The move from President Trump comes at a time when Indonesia’s TPT industry is already under pressure from rising imports and tight margins. The industry fears the added burden could threaten thousands of jobs and force factories, especially those in the garment sector, to cut production or even shut down.
With only weeks to go before the policy becomes reality, many industry players now find themselves caught between shrinking export competitiveness and a domestic market crowded by cheaper imported goods — a combination that could test the resilience of Indonesia’s textile and garment industry like never before.
