Factory owners in Indonesia say they’re already bearing the brunt of the uncertainty caused by US tariffs. Southeast Asia’s largest economy negotiated lower export duties, but many manufacturers are looking for new markets beyond America.

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Donald Trump has signed an order to impose tariffs imports into the U.S. from countries including China, Mexico and Canada.

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Indonesian garment manufacturers, long reliant on U.S. clothing companies as major clients, have faced significant challenges following the imposition of new tariffs by the United States. The tariff, initially set at 32 percent and later reduced to 19 percent, has disrupted business operations and affected profit margins. In response, manufacturers are diversifying their client base by seeking opportunities in non-U.S. markets, particularly in Japan and Europe.

Efforts to attract Chinese manufacturers have been hindered by similar tariff rates across Southeast Asia, reducing the incentive for relocation. Indonesian officials remain optimistic about negotiating better trade terms, despite criticism that recent concessions have been disproportionate. The industry continues to adapt to the evolving global trade environment.

Indonesia’s garment industry seeks new markets amid U.S. tariffs

For nearly 30 years, this garment manufacturer in Indonesia's central Java province has had a steady stable of clients. Most of them are U.S.-based clothing companies that supply some of the world's best-known brands. But the past few months have been tough. The factory manager, Deddy Mulyadi, says some customers have been cancelling orders. Of course this policy was unexpected, because with this tariff war, all of our estimates have been thrown off. We usually export to the United States, and now with the tariff war hitting our regular market in the U.S., it has affected our margins. In April, U.S. President Donald Trump imposed a 32 percent levy on Indonesian goods. But under a deal signed last month, it was reduced to 19 percent. Within weeks, however, other Southeast Asian countries struck similar agreements, essentially leveling the playing field. So we know so far Trump is really unpredictable. You know, he can change his mind overnight and so on and so forth. So at least for the current situation, 19 percent is still understandable, although it's not necessarily fair. Deddy says the rapid changes to trade taxes mean there's no room for complacency. We are taking on brands that aren't related to America, such as brands from Japan and Europe. So that is our goal, to look for new market prospects and start approaching countries that are not American markets. Hopes of attracting Chinese manufacturers have faded as well. What's the benefit of relocating our investment to Southeast Asian countries if they also get the same tariff rate as we get in China? Right now, I think China is still at around like 30 percent, and then they still do negotiation with the U.S., and right now the progress remains positive. Indonesian officials have expressed similar optimism, saying they're confident they can negotiate better terms despite settling for concessions that critics say are disproportional. Barnabello, Al Jazeera.

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Indonesia’s garment industry seeks new markets amid U.S. tariffs

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