The US Donald Trump Administration has announced an import tariff of 32% for Bali and the rest of Indonesia, substantially higher than neighboring countries of Malaysia (24%) and Singapore (10%).
The new punitive import tariffs will take effect from 09 April 2025 and will cause economic pain for all of Indonesia and also hurt Bali’s export sector.
As reported by NusaBali.com, Professor Dr. Ida Bagus Suardana, an Economist from the National Education University (UNIDIKNAS), said the high export tariff imposed against Indonesia, when compared to Singapore and Malaysia, will make Indonesian products more expensive and uncompetitive for the US market. “This policy will represent a big obstacle for Indonesian exporters who have relied on the USA as a main market,” said Suardana.
Bali and the rest of Indonesia are highly dependent on exports to the US, meaning Trump’s new tariff rules will have a significant impact on the business sector and export industry in Bali. The US represents Bali’s primary export market based on export/import data from the Bali Statistics Agency (BPS-Bali) in January 2025. The main products exported from Bali to the US include handicrafts, silver and gold jewelry, textile products, and agricultural commodities such as coffee and spices.
Professor Suardana said the main impact of these high tariffs is the increasing cost burden for Indonesian exporters who want to remain competitive in the US market. With higher selling prices due to tariffs, demand for Indonesian products as consumers choose products from countries with lower tariffs.
With the new import duties being applied in the USA, Indonesian exporters can expect to face pressures to reduce prices and profit margins to stay competitive. The anticipated decline in exports from Indonesia to the US may impact Indonesian industries, which will, in turn, reduce production capabilities and their workforce in the face of diminished sales.
The Dean of the Faculty of Economics and Business at UNIDIKNAS also said that the imposition of a 32 percent tariff was related to US trade policies aimed at protecting domestic industries and reducing trade deficits with several countries, including Indonesia.
In theory, the increase in import tariffs will reduce the competitiveness of Balinese products in the American market and cause a decline in demand from importers and consumers in that country,” said Prof. Raka Suardana.
The Dean of the Faculty of Economics and Business also said that the imposition of a 32 percent tariff was suspected to be related to US trade policies aimed at protecting domestic industries and reducing trade deficits with several countries, including Indonesia.
To overcome the export challenge, Suardana said, the Indonesian government could seek negotiations with the US government to obtain more competitive tariff treatment. In addition, diversifying export markets to other countries that have lower tariff policies is a solution that can be taken by Balinese exporters so as not to be too dependent on the American market.
Prof. Raka Suardana added that improving product quality and innovation is also necessary to ensure that Balinese products remain in demand despite facing the challenge of higher tariffs. “With this strategy, it is hoped that Indonesian exports, especially from Bali, can continue to grow despite facing obstacles to US trade policies.”
Meanwhile, economic experts are predicting a 60% probability of a global recession characterized by reduced consumer spending, which could empty aircraft and hotels at holiday destinations worldwide, including Bali.
Related Links
Tourism Boosts Bali’s Economy +5.43%
Stay Informed on Bali Tourism-Related News: Subscribe to Bali Update
