Trump Pangkas RI Tariffs To 19 Percent, Minister Of Industry Agus Disbursed Its Impact On Industry

Minister of Industry Agus Gumiwang Kartasasmita. (Photo: ANTARA)

Minister of Industry (Menperin) Agus Gumiwang Kartasasmita said national industry players appreciated the results of President Prabowo Subianto's negotiations with the United States Government (US).

The result of this negotiation was that the import rate of Indonesian products in the US fell to 19 percent.

This is an important capital for increasing the competitiveness of the national industry.

"National industry players really appreciate the achievements of Mr. President Prabowo in an effort to renegotiate Indonesia's import rates to America. This is clear evidence from his leadership in fighting for the interests of the domestic industry in the global arena," Agus said as quoted from his written statement, Thursday, July 17.

Agus said this agreement would stimulate Indonesia's manufacturing sector because export doors to America were even wider open.

This agreement is also believed to increase the competitiveness of Indonesian manufactured products in the export market, especially in the American market.

"The American decision to reduce or adjust tariffs to a number of Indonesian manufacturing export commodities will certainly increase the competitiveness of our products in their market. This will have a direct impact on the industry, especially utilization, job creation and strengthening of the national industrial structure," he said.

As for the production chain scheme, currently Indonesia's manufacturing sector output ratio for export and domestic market purposes is 20:80. This means that 20 percent of Indonesia's manufacturing product output is intended for export markets, which are partly sold to the US market.

It is known, the export value of Indonesian products to the US throughout 2024 reached 26.31 billion US dollars or around 9.94 percent of Indonesia's total exports to the world, namely 264.70 billion US dollars.

The level of Indonesian industrial utilization in 2024 is also recorded at 65.3 percent.

"This indicates that the production utilization space that can be increased by industry is even higher in response to the positive demand for the American export market after this tariff agreement," Agus explained.

Indonesia also recorded a trade balance surplus with America of 14.34 billion US dollars or accounted for 46.2 percent of Indonesia's total trade surplus that year.

According to Agus, the announcement of the American import rate agreement is believed to stimulate the industry to increase production utilization, especially the utilization of export-oriented labor-intensive industries.

"Of course, this will increase the absorption of labor even more broadly in labor-intensive industries, such as the textile industry, textile products, finished clothing, footwear and others," he explained.