JAKARTA - Economist and Director of the Digital Center of Economics and Law Studies (Celios) Nailul Huda stated that there are 1.2 million workers in the country who have the potential to be laid off due to the tariff war between the United States (US) and China.
"1.2 million is the total workforce cut," he said in Jakarta, Thursday, April 17.
He explained that this figure comes from all industrial sectors in one projective year, with the highest potential reduction in textile sub-sectors and textile products (TPT) which reached 191 thousand workers.
"You could say that the absorption of labor in the textile industry will decrease by around 191 thousand, this is our rough count," he also said.
Huda said the calculation of the potential layoffs came from the impact of the imposition of entry rates from the United States (US), which was 1 percent equivalent to 0.8 percent, a decrease in export volume.
As for the projected layoffs in the TPT sector, due to the current export of domestically made products to the US, it is quite high, and on the other hand, the domestic market is also under pressure due to the rise of lower imports from China.
"As a result, the added value of the TPT industry can decrease," he said.
Earlier, on April 2, US President Donald Trump signed an executive order setting reciprocal rates for imports from various countries.
The basic tariff is set at 10 percent, with a higher tariff imposed on 57 countries based on the magnitude of the US trade deficit with each country, including Indonesia, which is subject to a 32 percent reciprocal rate.
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Then, on April 9, Trump announced that a 10 percent base rate would be imposed for 90 days against more than 75 countries that have not taken any countermeasures and have asked for negotiations, except China.
As the trade war progressed, US tariffs on goods from China increased by 145 percent, while China's tariff on American products reached 125 percent.
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