U.S. Tariffs on Indonesian Clothing: The Real Impact on Your Margins
U.S. Tariffs on Indonesian Clothing: The Real Impact on Your Margins
On April 2, the U.S. government imposed a new 34% tariff on clothing imports from Indonesia—including swimwear and activewear made with synthetic fibres.
It sounds dramatic. But here’s what most people are getting wrong: Your profits are not dropping by 34%.
Even with the added duty, the actual impact on your gross margins is much smaller. In fact, it’s a shift from 74.7% down to 67%—a difference that’s measurable but manageable.
This Is Likely Temporary
Many of the countries affected by these new U.S. tariffs are already negotiating reduced rates. The policy has been positioned as reciprocal—meaning the U.S. uses it as a trade lever, not a long-term penalty.
Indonesia is part of that broader picture. Based on how quickly other nations have secured tariff rollbacks (some within 24 hours), there’s every reason to believe this is a short-term adjustment, not a permanent cost.
Quick Margin Comparison
Based on our average FOB price of $13 per unit and a typical retail price of $65, here’s how the gross margin looks before and after the new Tariff:
| Scenario | Landed Cost | Gross Profit | Margin |
|---|---|---|---|
|
Before Tariff |
$16.46 |
$48.54 |
74.7% |
|
After 34% Tariff |
$21.46 |
$43.54 |
67.0% |
Why This Isn’t a Crisis
At 67%, your margins are still strong. You have plenty of space to:
- Maintain current retail pricing.
- Run promotions.
- Continue building profit without disruption.
This isn’t the kind of shift that forces a major strategy change.
We continue selling at the same FOB prices—what’s changed is the duty applied on your side. The new landed cost is easy to factor in, and the overall structure of your business model doesn’t need to change.
What’s Not Changing
✅ Product Quality: Production standards remain high.
✅ Lead Times: Orders are still shipping on time.
✅ Product Availability: Swimwear and activewear styles are in stock.
✅ Pricing Consistency: FOB prices remain the same. Only U.S. import duty has changed.
Final Thought
Landed costs have gone up—but the big picture hasn’t changed. Your gross profits are still healthy. Your supply chain is stable. And your pricing strategy continues to work.
If you’d like help reviewing specific SKUs, estimating your post-tariff landed costs, or planning your next order—we’re here to help. Just reach out, and let’s work through it together.
