Ministry Of Trade Admits US Tariff Policy Will Disrupt Indonesian Export-Imports

JAKARTA - The Ministry of Trade (Kemendag) acknowledged that the 32 percent reciprocal tariff policy imposed by the President of the United States (US) Donald Trump would interfere with the performance of Indonesian exports and imports.

The Director General (Dirjen) of International Trade Negotiations of the Ministry of Trade, Djatmiko Bris Witjaksono, said that Indonesia's export and import performance would decline if the 32 percent reciprocal tariff policy was implemented by the US.

Moreover, continued Djatmiko, coupled with a new basic tariff policy of 10 percent that will be imposed on goods entering the US from all over the country, except for Maxico and Canada.

"For Indonesia, yes, this is suffering from our calculations, this can also reduce export and import performance with different ranges for each sector," he said in a virtual press conference, Monday, April 21.

Even so, Djatmiko saw the potential for an increase in investment that would enter Indonesia, if the reciprocal tariff and basic tariff were only carried out by the US.

"But there is also one calculation result that we get that with the absorption of this tariff it will also increase opportunities for investment activities. Quantitatively, the figure is not stated, but it is predicted that it will increase the flow of Asian or FDI investments. If this tariff is carried out either reciprocal or the new baseline tariff," he explained.

As previously reported, there are three tariffs imposed by the US on Indonesia. First, the new basic tariff or new baseline. Where the US increases its basic tariff by 10 percent from the old basic tariff.

"How long is the basic tariff? Things, depending on the amount of the tariff, the goods are a lot, depending on what item, maybe some are 0, maybe some are 5, maybe some are 10, and so on. (But that's all increased by 10 percent," said Director General (Dirjen) of International Trade Negotiations of the Ministry of Trade, Djatmiko Bris Witjaksono in a virtual press conference, Monday, April 21.

Djatmiko said that the new basic tariff policy was applied to all countries except for Maxico and Canada.

This is because they have a trade agreement, namely the United States-Mexico and Canada Agreement.

Another tariff policy imposed by the US on Indonesia, continued Djatmiko, is the reciprocal tariff.

The amount of tariffs that Indonesia will pay for exports to the US is 32 percent.

Third, continued Djatmiko, the new tariff policy imposed by the US on Indonesia is sectoral tariffs.

This tariff will be imposed on several special commodities, namely automotive aluminum steel and automotive components of 25 percent.

"So if this sector, one country has been subject to sectoral tariffs, for example, Indonesia exports steel or aluminum or automotive and its components, then it will be subject to a sectoral tariff of 25 percent, then new and reciprocal basic rates will not be imposed," he said.

Djatmiko said the new tariff policy was an addition of the initial tariff set by the US to trading partners based on the type of goods.