Economist Reveals Potential Wave Of Layoffs In Indonesia Due To Trump Tariff 19 Percent

JAKARTA - The imposition of the reciprocal tariff policy of the President of the United States (US) Donald Trump on Indonesia is 19 percent believed to have various negative impacts in the future.

One of the things that the Indonesian government needs to watch out for is the potential for termination of employment (PHK).

Economist from the Center of Economic and Law Studies (Celios) Bhima Yudhistira Adhinegara assessed that the 19 percent tariff agreement would lead to a wave of factory relocations from Indonesia.

"There will be a wave of factory relocations leaving Indonesia because it is better to be an importer of US products than to be an exporter of industrial products," Bhima told VOI, Friday, July 18.

In fact, Bhima assessed that there is an interest of foreign investors to invest in other countries rather than Indonesia.

"That's right (prefer to other countries)," he said.

Thus, he said, the thing to watch out for is the wave of layoffs due to the escape of investors from Indonesia.

Bhima assessed that the wave of layoffs could later spread to various sectors.

"There is still a threat of layoffs, it is actually widespread in various sectors, especially agriculture and livestock," said Bhima.

However, the economist has not been able to disclose detailed data regarding the potential loss of investment due to the 19 percent tariff policy.

"It is still calculated (the estimated missing investment)," he said.

Furthermore, Bhima conveyed a number of steps that the government could take to mitigate the threat.

Starting from revising the results of 0 percent tariff negotiations, forming a layoff task force to lowering the value added tax rate (VAT) to 8-9 percent.

"(If the government does not mitigate), it could be a big loss (Indonesia)," he concluded.

Previously, US President Donald Trump announced that his party had reached a trade agreement with Indonesia.

In the agreement, goods from Indonesia will be charged a tariff of 19 percent, while exports from the US to Indonesia will not be taxed.

"Indonesia will pay the United States a 19 percent tariff for all the goods they export to us, while US exports to Indonesia will be free of tariff barriers and non-tariffs," Trump wrote via the @realDonaldTrump account on Truth Social social media on Tuesday, July 16, 2025.

Trump said the deal was a historic agreement reached after speaking directly with President Prabowo Subianto.

Dia mengeklaim, kesepakatan penting tersebut membuat AS dapat membuka seluruh akses ke pasar Indonesia dan menjadikannya untuk pertama kali dalam sejarah.

Selain itu, sebagai bagian dari kesepakatan tersebut, Trump mengatakan Indonesia juga berkomitmen untuk berinvestasi terhadap sejumlah produk Amerika.

"Sebagai bagian dari perjanjian tersebut, Indonesia telah berkomitmen untuk membeli 15 miliar dolar AS dalam energi AS, 4,5 miliar dolar AS dalam produk pertanian Amerika dan 50 jet boeing, banyak di antaranya adalah 777," jelas dia.

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He claimed that this important agreement allowed the US to open all access to the Indonesian market and make it the first time in history.

In addition, as part of the deal, Trump said Indonesia is also committed to investing in a number of American products.

"As part of the agreement, Indonesia has committed to buying 15 billion US dollars in US energy, 4.5 billion US dollars in American agricultural products and 50 boeing jets, many of which are 777," he explained.