U.S. Leaves Vietnam with Lower Tariffs as Indonesia Hit with 32% Charge; Here's Why

TEMPO.CO, Jakarta - The United States still imposes a 32 percent import tariff on Indonesian products as of July 7, 2025, as first announced in April—indicating that the government's negotiation efforts over the past three months have not yielded results. Meanwhile, Vietnam successfully reduced its import tariff from 46 percent to 20 percent on July 9.

Dandy Rafitrandi, a researcher from the CSIS Economic Department, believes that Vietnam's success is due to its more concrete economic offers to Washington.

"Vietnam's exports to the United States amount to around US$13 billion. We conducted a simulation, if the United States' tariff on Vietnam is reduced to 0 percent, the United States' trade deficit is down by US$3 billion per year," said Dandy in the CSIS media briefing in Jakarta on Thursday, July 10, 2025.

According to him, Vietnam presents a significant opportunity to reduce the U.S. trade deficit, which was a primary concern for President Donald Trump during his tariff campaign. "Trump has an interest in demonstrating that this tariff policy is successful," said Dandy.

In contrast, Indonesia's offers are said to be one-time and symbolic. Dandy believes that the government needs to formulate a new negotiation strategy that takes into account economic sustainability and provides direct benefits to the U.S. trade balance.

Although considered a success, CSIS Researcher Riandy Laksono, in the same event, noted the risks in the deal reached by Vietnam, as it applies only to goods made in Vietnam. Goods proven to be a result of transshipment from other countries, especially China, will be subject to higher tariffs.

"The problem is trans-shipping remains unclear to this day," said Riandy. "For example, if Vietnam imports fabric from China and gives it a print before exporting it to America, that could be labeled as transshipment."

Trump openly stated that the trade deal with Vietnam includes full access to the U.S. for Vietnam's market. In his post on Truth Social on July 2, 2025, Trump stated, "In return, Vietnam will do something that they have never done before, give the United States of America TOTAL ACCESS to their Markets for Trade,” he added. “In other words, they will ‘OPEN THEIR MARKET TO THE UNITED STATES,’ meaning that, we will be able to sell our product into Vietnam at ZERO Tariff."

According to Riandy, Indonesia still needs to maintain the principles of openness and non-discrimination in its trade diplomacy. "Indonesia must build a coalition with countries facing similar pressures," he said. This factor is important to ensure that the national supply chain is left undisturbed and Indonesia's position remains strong in the global trade map.

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