The US Tariff Policy Is A Moment To Fix The Administration Of Iron And Steel Imports

JAKARTA - The Indonesian Iron and Steel Industry Association (IISIA) considers that the 32 percent US import tariff policy can be a momentum to fix national iron and steel trading.

Chairman of IISIA, Muhamad Akbar Djohan said that this US tariff policy has a positive and negative side for Indonesia. Positively, it can be a momentum to improve regulations aimed at providing protection for the steel industry and import trading system.

"We hope this will be a momentum to improve regulations leading to providing protection for the domestic steel industry and momentum to fix import trading," he said at a press conference in Jakarta, Friday, April 11.

Akbar said the impact of the US import rate policy was not very significant on domestic industries, because in total our Gross Domestic Product (GDP) contribution to exports to Uncle Sam's country was not large, not even more than 18 percent.

Although the impact is not too big on Indonesia's exports, Akbar said the policy could be a reference for strengthening the protection of the domestic steel industry.

"In total, our GDP contribution to exports there is also not very big. No more than 18 percent," he said.

On the negative side, continued Akbar, there are risks that may arise due to the high tariff. One of the highlights is that this import tariff war will make China reluctant to sell its products to the US market, and look for alternative markets such as Indonesia. This condition will certainly make local steel products lose competitive.

Moreover, Akbar continued, China is the largest producer of iron and steel products in the world. Where the production rate reaches 1.2 billion tons per year.

"The impact of the tariff issued by the US President does not have a direct impact on us. But what needs to be anticipated is the products (China) that should go to the US. This must be looking for a market, one of which is Indonesia," said Akbar.

According to Akbar, this condition needs to be anticipated by Indonesia. Moreover, he said the global supply chain or global supply chain could not be prevented.

"This is what we need to anticipate, global supply chain cannot be prevented and beyond our control," he said.

Therefore, Akbar said that the government through related ministries/agencies needs to take action to suppress the flow of imported iron and steel. According to him, this policy is needed to create fair competition and also provide space for developing domestic producers.

Akbar is worried that entrepreneurs will choose to close factories and terminate mass employment (PHK) if there is no maximum protection from the government.

What we are worried about is industrialists, otherwise we will give maximum protection, industryists and their industries will close and mass layoffs will occur. And surely this layoff problem will not provide a conducive security situation in every country," said Akbar.