Will 19% Tariffs Kill the U.S.-Indonesia Kratom Trade?
wearemagictree.com — The year 2025 poses a new challenge for Indonesia’s kratom export industry. On July 6, U.S. President Donald Trump officially implemented a 19% increase in import tariffs on various commodities from over 60 trading partner countries, including Indonesia. This policy is part of the Reciprocal Trade Act program, which aims to “balance” international trade tariffs based on the principle of reciprocity.
However, behind the trade jargon, this move has sparked significant concern among Indonesian exporters, including the rapidly growing kratom industry, which has become one of Indonesia’s most promising non-oil and gas export commodities.
Trump’s Policy and the Reasons for the New Tariff
The 19% tariff increase did not happen without cause. The U.S. government considers countries like Indonesia to have imposed “unfair” tariffs on American products. In unilateral assessments, Indonesia is said to have tariffs as high as 64%, although in reality, Indonesia’s average tariffs on goods from the U.S. are around 8.6%.
From this figure, the U.S. offers a “political discount” of up to 32% and sets the new tariff at 19%. Although not explicitly stated, herbal products like kratom fall under HS Codes 1211.90 and 1302.19—categories that could technically be subject to this new tariff.
Will Kratom Be Affected by the 19% Tariff?
Up to now, kratom has not been explicitly listed among the affected goods under the 19% tariff. However, classifying kratom as a non-medicinal herbal plant product places it in a general category that could be impacted by the tariff.
The Indonesian government, through the Ministry of Trade, is still engaging in diplomatic efforts to seek exemption or tariff discounts for Indonesian flagship products, including kratom. No final decision has been made yet on whether kratom will be exempted or not. Bilateral negotiations are ongoing.
Kratom Import Data and Market Impact
Indonesia’s kratom exports to the U.S. show a fluctuating trend:
- 2023: 4,702.6 tons
- 2024: sharply decreased to 3,290 tons
This decline is caused not only by tariffs but also by:
- Several U.S. states banning kratom
- Legal and regulatory uncertainties
- Economic impacts from trade wars and rising logistics costs
If the 19% tariff is indeed applied to kratom, product prices will soar. As a result, U.S. consumers will pay more, while Indonesian exporters will lose competitiveness and profit margins.
There Is Still Hope: Efforts and Solutions
Although the situation looks critical, several options could open pathways:
- Product-Specific Exemptions
The U.S. often provides specific product exemptions that can be applied for by businesses or associations like the American Kratom Association (AKA). If approved, kratom could be free from the new tariffs. - Bilateral Trade Agreements
If Indonesia manages to negotiate a special tariff arrangement for kratom, exemptions may still be possible. - Strategic Compensation
MagicTree, as an exporter and direct farmer, is prepared to adjust pricing structures and distribution models to help U.S. trading partners face these new tariffs.
Conclusion: Threat or Opportunity?
The 19% tariff can be seen as both a threat and an opportunity. Indonesia’s kratom industry needs unity among exporters, the government, and international partners. Despite the decline in exports to the U.S., Indonesian kratom remains popular in global markets such as India, Japan, Germany, and the Czech Republic.
As a responsible and pro-regulation business, MagicTree fully supports fair and transparent export policies. We also encourage international dialogue to ensure trade policies do not harm farmers, workers, and global consumers.
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