Indonesia Optimistic in Facing US Forced Labor Allegations

March 24, 2026 | 07:43 pm

TEMPO.CO, Jakarta - The government is optimistic about responding to allegations in the Section 301 investigation conducted by the United States against 16 economic areas, including Indonesia. In its investigation, the US mentioned two allegations: overcapacity and issues related to the enforcement of the import ban on goods produced with forced labor.

Spokesperson for the Coordinating Ministry for Economic Affairs Haryo Limanseto explained the basis for this confidence. "The government is optimistic because the alleged structural excess capacity and forced labor in several countries did not occur in Indonesia, and we have supporting data and information," he told Tempo on Tuesday, March 24, 2026.

Moreover, Haryo said these two allegations have actually been part of the discussions during the reciprocal trade agreement, which has already been mutually agreed upon.

Currently, cross-ministerial teams, government agencies, and industry associations are coordinating a response, including through a public hearing session, before April 15, 2026. There are also plans for a government-to-government consultation session with the Office of the United States Trade Representative (USTR). "The date for the consultation session is being mutually agreed upon," he said.

Section 301 under the Trade Act of 1974 is a regulation that authorizes the USTR to investigate and impose sanctions on foreign governments deemed to engage in unfair trade practices against the US. This step was taken after the US Supreme Court overturned the legal basis for the previously applied reciprocal tariff policy.

Chairperson of the Indonesian Employers' Association (Apindo) Shinta Kamdani stated that the context of the Section 301 investigation is to examine allegations of overproduction in the Indonesian manufacturing sector, which is considered potentially trade-distorting. Also, the issue relates to the enforcement of the import ban on goods produced with forced labor.

In the USTR document, sectors mentioned include steel, cement, electronics, and solar modules. "However, it is important to further clarify which specific sectors are relevant to Indonesia because for some of these sectors, Indonesia's exports to the US are relatively small, even insignificant in some cases," she said.

Therefore, the potential direct impact needs careful assessment based on actual trade data to avoid generalization. Amid this investigation, Indonesia has signed the ART, which is in the process of ratification. Consequently, according to Shinta, market access for several main products subject to a preferential 0 percent tariff is expected to remain in effect.

Key agricultural and industrial products such as palm oil, coffee, cocoa, spices, rubber, as well as textile and apparel products should in principle still enjoy a 0 percent tariff. "As long as the mechanisms and approval of each country's authorities are fulfilled," she said.

Read: Indonesia Prepares Case to Show Compliance in U.S. Trade Probe

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