Indonesian Footwear Industry Faces Challenges from US Tariff Hike

APRISINDO Urges Government Action

The Indonesian footwear industry is facing significant challenges due to the recent increase in US tariffs on Indonesian footwear exports. The tariff has been raised to 19% since August 7, 2025, from a previous rate of 10%. The Indonesian Shoe Industry Association (APRISINDO) has expressed its concerns and is urging the government to take action to mitigate the impact.

Economic Impact on Footwear Exports

The higher tariff has resulted in a 23.14% decline in Indonesian footwear exports to the US during the period of August-September 2025, according to data from the Central Bureau of Statistics (BPS). This decline is attributed to weakened orders due to the increased tariff, which has subsequently affected productivity and increased the risk of layoffs in the industry. The labor-intensive footwear sector, which employs nearly one million workers, is particularly vulnerable to these changes.

APRISINDO's Position and Requests

APRISINDO supports the efforts of President Prabowo Subianto and Coordinating Minister for Economic Affairs Airlangga Hartarto in negotiating reciprocal tariffs with the US. However, the association emphasizes that the tariff for footwear should be reduced to 0% or at least significantly lower than the current 19%. APRISINDO argues that the current negotiation draft only provides 0% tariff for commodities based on tropical natural resources, while labor-intensive manufacturing sectors like footwear remain subject to high tariffs.

Historical Context and Future Implications

The situation is reminiscent of previous challenges faced by the textile industry. Exporters had been apprehensive about even higher tariffs, up to 32%, during April-July 2025, which led to cautious expansion and export strategies. The recent 19% tariff, while lower than the feared 32%, still poses significant challenges. APRISINDO's call for a 0% tariff aims to prevent further negative impacts on the industry's productivity and employment.