Exporters and manufacturers across Indonesia are starting to feel the effects of Trump's reciprocal tariffs, with local producers having to reduce production and operation costs to offset the tariffs.
The Southeast Asian country manufactured and exported roughly 2.4 billion U.S. dollars' worth of footwear products to the U.S. in 2023.
One manufacturer in the country produces 60,000 pairs of shoes worth 1.8 million U.S. dollars per month and export them to the American market. Most of what the company makes are end-products of ready-to-wear shoes manufactured in Tigaraksa, Banten Province.
"Our main exports to the United States are for American brands like 'Oakley' and 'Lift'," said Edwin Tanjung, head merchandiser of footwear manufacturer Aggiomultimex International Group, which produces rugged boots and aviation boots for those brands.
However, the recent 32 percent U.S. tariffs slapped on Indonesian imports are worrying local businesses as customers ask for goods to be shipped earlier or even discuss the possibility of reduced prices.
Manufacturers are now cutting production and operation costs as they brace for more uncertainty.
"If the tariffs stay the same, this will put a burden on the footwear industry. We know that the American market is huge, with a large population and purchasing power," said Tanjung.
Fithra Faisal, chief economist of securities and investment company Samuel Sekuritas Indonesia, said that the tariffs will compound the problems Indonesia's economy had already been facing.
"Without the Trump tariffs, we are expecting 200,000 people being laid off this year. Maybe with this tariff ongoing we (may) have an additional 50,000 people (laid off)," said Faisal.
Last year, the country saw 94,000 layoffs.
However, Indonesian producers can at least take comfort in the fact that they face lower levies than neighboring countries.
"We are hoping to get potential customers that plan to relocate their factory here to Indonesia from Vietnam and Cambodia - which has a slightly higher tariff," Tanjung said.
Analysts believe that most ASEAN countries are not ready to have a trade war and are unwilling to retaliate, leaving these countries open to negotiation as an option.
"Because this is reciprocal tariffs, reciprocity means that we can also sell them more of our textiles or CPOs (crude palm oils) at the expense of our importing their defense equipment, soybeans, wheat," Faisal said.
The Indonesian Government says it will continue to negotiate with the U.S. with hopes of reducing or even removing tariffs and other trade barriers.
Indonesian footwear manufacturers cut costs to offset US tariffs
The Iranian government is focusing on public concerns and maintaining stable supplies of essential goods amid recent protests, Iranian President Masoud Pezeshkian said in a televised interview on Sunday.
In the city of Karaj, northwest of the capital Tehran, daily life has largely continued as normal. A video filmed by a local resident on Sunday shows food stores open and grocery shelves fully stocked.
"This is the block near my home, and there are some food stores here. Daily life continues here. Last night we did not see many protests in Karaj. Right now the city is very safe. This is a grocery store close to my home. All the food is available; nothing is in shortage. Here are noodles and different types of beans. Here are dairy products, cheese, and yogurt. I also checked other grocery stores and didn't see any shortages. Everything is available," said local resident Ali Reza.
Iranian officials have described recent disturbances as acts orchestrated by the "enemy," including some carried out by well-trained and armed "terrorists." The incidents have caused casualties among security personnel and civilians, as well as property damage.
The Secretary of Iran's Supreme National Security Council Ali Larijani has directed authorities to severely punish the "terrorists."
Meanwhile, Iran's police chief Ahmad-Reza Radan said on Sunday that the police had raised alert levels and arrested several leaders of the troublemakers during the operations on Saturday.
President Pezeshkian noted in the interview that the normal demands of the Iranian people are reasonable and justified, but they must realize that triggering riots and carrying out terrorist acts are the enemy's attempts to undermine the country. He urged the public to remain vigilant.
Also on Sunday, Iranian Parliament Speaker Mohammad Baqer Qalibaf warned that Tehran would regard U.S. and Israeli bases and facilities in the Middle East as "legitimate targets" if Washington takes military action against Iran. His remarks followed media reports saying U.S. President Donald Trump is "seriously considering authorizing a strike" against Iran.
Iranian state media reported that at least 109 members of Iran's security forces have been killed in clashes since the protests began 14 days ago. Meanwhile, human rights groups based outside the country said the number of protesters killed has exceeded 200, though the figure could not be independently verified.
The protests initially erupted over a sharp depreciation of the rial and sweeping subsidy reforms. Iranian authorities have blamed the unrest on foreign-linked agents and sanctions imposed by the United States.
Iranian president says government focusing on ensuring supplies amid protests
