Trump's Import Tariff Threatens National Industry, INAPLAS Urges Government To Immediately Take Action To Maintain Markets And Downstream Industry

JAKARTA - United States President Donald Trump's decision to impose a new import tariff policy titled Reciprocal Tariffs, or what is now dubbed the Trump Tariff, has been a major blow to a number of US trading partner countries, including Indonesia.

Later, the main export products of Indonesia which are estimated to be affected by this policy will include leading sectors such as electronics, textiles and textile products (TPT), footwear, palm oil, rubber, furniture, shrimp, and marine fishery products. So far, this sector has become the backbone of Indonesia's trade to the US.

The Association of Indonesian Olefin, Aromatics and Plastic Industries (INAPLAS) expressed its views regarding the new policy of the United States which raised import rates for a number of commodities from Indonesia by up to 32 percent, as part of the global trade war escalation.

In dealing with this situation, INAPLAS emphasized the importance of protecting the domestic market to maintain the competitiveness of Indonesia's industry, especially in the chemical and petrochemical sectors which are strategic industries for other industrial sectors.

In his official statement, Edi Rivai as Deputy Chairperson of INAPLAS stated, with Indonesia's position with a large market and relatively strong purchasing power, this country has the potential to become an export destination for many countries affected by US tariff policies.

"This can cause flooding of imported goods that can harm the domestic industry, threatening the sustainability and competitiveness of strategic sectors such as chemicals and petrochemicals," he said, in a written statement, Friday, April 4.

According to INAPLAS, this flood of imported products is not just an ordinary trade issue, but a direct threat to the continuity of national manufacturing. Without adequate protection policies, the national industry can be rolled up by cheap imported goods that flood the market.

INAPLAS also emphasized that the government must immediately anticipate with strict market protection policies. One of them is by accelerating the process of anti-dumping and safeguard investigation by the Ministry of Trade, in this case the Indonesian Anti-Dumping Committee (KADI) and the Indonesian Trade Security Commission (KPPI).

"With quick and responsive steps, Indonesia can prevent further losses in the national industrial sector to alternative markets by other countries such as Thailand, Vietnam, Malaysia, China to Indonesia as a result of President Trump's tariff policy," said Edi Rivai.

In addition, INAPLAS also emphasized the importance of maintaining the Domestic Component Level (TKDN) policy.

The TKDN policy must be maintained as the main foundation of national industrial independence. For the chemical and petrochemical sectors, the implementation of TKDN is not only a matter of partiality, but also a long-term strategy to reduce dependence on imports, strengthen the use of local raw materials, and build a sustainable industrial ecosystem that can at the same time absorb labor in Indonesia," said Edi Rivai.

Furthermore, this association also encourages the government to return the 12 HS Code 39 tariff posts which have previously been removed in the policy of controlling imported goods Regulation of the Minister of Trade No. 36 of 2023.

"We encourage the government to immediately return 12 HS Code 39 tariff posts as in Permendag No. 36 of 2023 which were removed through Permendag 8 of 2024. These tariff harmonization codes are closely related to plastic raw materials and are very strategic for the sustainability of the domestic industry. The elimination opens the tap for importing substitution products that weaken local industries. With the recovery of this HS Code, we believe that the competitiveness of the national plastic industry can be maintained amidst the onslaught of foreign products, "added Edi Rivai.

INAPLAS also proposed that the government maintain import rates from the United States. According to INAPLAS, goods from the US are now unable to compete priced with domestic products that tend to be more efficient.

By continuing to apply tariffs to US products, Indonesia not only shows a reciprocal attitude towards Trump's policies, but also strengthens protection against domestic markets that have not yet recovered, as well as market certainty in an effort to strengthen the downstream investment climate in the petrochemical sector to meet domestic domestic domestic domestic demand.

Our surplus is not too big, the most electrical and textile commodities, so we don't have to rush to lower the tariff while maintaining the MFN tariff for plastic raw materials. So that we maintain the resilience of the domestic market industry and maintain the investment climate of the petrochemical downstream sector that is being built," said Edi Rivai.

Similar concerns also came from the Deputy Speaker of the Indonesian House of Representatives, Sufmi Dasco Ahmad. He emphasized that the US is an important trading partner. The United States is an important trading partner for Indonesia. We must carry out trade diplomacy well," he said in a written statement.

Dasco warned that Indonesia should not become a place to dump goods from other countries that cannot enter the American market. According to him, if this is not anticipated, then the downstream process being built by the government could be threatened with failure.

"This is very dangerous for Indonesian industrial products and can thwart our downstream process. We must maintain this joint national interest together between the government, the private sector, executives, legislatures, and law enforcement," said Dasco.