Footwear Industry Will Be Impacted by Trump Tariffs

JAKARTA, KOMPAS – The imposition of a 32 percent import duty by US President Donald Trump on Indonesia will have an impact on the footwear industry. The United States has been a large market for the footwear industry, which will cause a decrease in orders and price adjustments that will take at least six months.

Regarding the tariff determination, Chairman of the Indonesian Footwear Association (Aprisindo) Eddy Widjanarko said that the tariff determination for Indonesia will have an impact on the footwear industry. The 32 percent tariff will reduce orders and price adjustments that will take at least six months.

"This means that in the next six months, PO (purchasing orders) will shrink and could result in exports to America which could result in reduced production and possibly layoffs," Eddy told Kompas, Thursday (3/4/2025).

After the tariff was set, Eddy continued, Indonesia must be more careful in choosing new markets in the future. Several potential markets that can be targeted are Europe and China. However, the challenge is that purchasing power in Europe is declining. Meanwhile, China will also help its domestic industry first.

Meanwhile, businessmen are wondering about the disproportionate tariff scheme. Against Indonesia experiencing a deficit of 18 billion US dollars, the US applies a 32 percent tariff.

Meanwhile, other countries that give higher deficits to the US are charged lower tariffs. India, for example, is only charged a tariff of 26 percent. In fact, the US has a deficit of 46 billion US dollars in its trade with India.

Malaysia, which has a deficit of $25 billion, is only charged a 24 percent tariff. Japan is also charged 24 percent even though it has a deficit of $69 billion to the US.

Likewise, South Korea, which has a deficit of $66 billion to Washington, is only subject to a 25 percent tariff.

Other countries that get “small” tariffs despite giving big deficits to America are the European Union and Switzerland. Tariffs to Indonesia are below China, Vietnam, and Cambodia.

BPS data shows that throughout 2023, based on the non-oil and gas goods category, footwear entered the top 10 with the highest export contribution with an FOB value reaching 6,436.4 million US dollars. Throughout 2024, the FOB value increased by 7,084.4 million US dollars. Meanwhile, in January 2025, the FOB value of footwear was 626 million US dollars.

In 2023, the footwear industry's export contribution to the US reached 1,920 million US dollars with a total of 89.58 million tons. In 2024, the export value increased to 2,393 million US dollars with a total of 124.56 tons of footwear.

BPS data for January 2025 detailed that the total sports shoes exported to the US reached 6.14 million tons with an FOB value of 134.28 million US dollars. Footwear for daily use amounted to 3.59 million tons with an FOB value of 67.08 million US dollars. Field engineering shoes or industrial needs amounted to 272,416 tons worth 3.4 million US dollars.

"The United States is Indonesia's largest footwear export destination," he said. Eddy hopes the government can be proactive in talking to the US government to free Indonesia from the high tariffs.

Chairman of PT Adis Dimension, Harijanto, said that the Indonesian government must send negotiators to the US so that Indonesia is not subject to reciprocal tariffs.

He is worried that the impact of higher import tariffs on Indonesia could cause customers to move to countries with lower tariffs.

"If footwear is subject to tariffs, we will be less competitive for the US market. If we can no longer negotiate bilaterally, the threat is that the shoe industry could shift to India because its tariffs are 6 percent cheaper than ours," Harijanto said.

As reported by Kompas.id (3/4/2025), Wednesday evening (2/4/2025) Washington time, or Thursday morning (3/4/2025) Jakarta time, the President of the United States, Donald Trump announced a list of basic tariffs and import duties on many of the country's trading partners. Trump called the day the announcement was made as "Liberation Day". Indonesia did not escape the sting of "Liberation Day".

In the list presented, Indonesia was subjected to a reciprocal tariff of 32 percent. "In many cases, especially in terms of trade, friends are worse than foes," said Trump while announcing the policy at the White House. "We subsidize many countries and enable them to do business and thrive," he continued.

“Why are we doing this? I mean, when do we say you guys have to work for yourself… We finally put America first,” Trump said.

According to him, the trade deficit is no longer just an economic problem. The deficit, Trump continued, is a national emergency, while holding up a sign with a list of countries and the new tariffs the US has imposed on them.

"It's our declaration of independence," Trump said from the White House Rose Garden.