JAKARTA - Minister of Industry (Menperin) Agus Gumiwang Kartasasmita openly conveyed the potential impact of the United States (US) reciprocal tariff policy on domestic manufacturing.
To note, US President Donald Trump imposed a 32 percent tariff on Indonesia, although its implementation was postponed for the next 90 days.
According to Agus, the first impact that will be felt is the disruption of the global supply chain related to the willingness of raw materials.
Second, the export volume of Indonesian manufacturing products can also be reduced.
"Of course the first is the disruption of the global supply chain to the availability of raw materials. Then the second is the decline in Indonesia's competitiveness and export volume," Agus said in a Working Meeting with Commission VII DPR RI at the Parliament Complex, Senayan, Jakarta, Tuesday, April 29.
The third impact, namely the threat of flooding in imported products from countries affected by resipprocal rates. Fourth, reducing labor to shifting export markets.
"Thirdly, the threat of flooding in imported products from other countries is affected. Fourth, the threat of reducing labor and also shifting export markets," he said.
Agus said Trump's policies contributed greatly to the economic uncertainty of many countries.
"We have to always be careful. Every morning we have to look into whether there is a new policy that appears or is determined by Trump and this is what causes very high uncertainty," said Agus.
He said Indonesia had sent a team led by the Coordinating Minister for Economic Affairs Airlangga Hartarto to negotiate with the US Government.
The team will adhere to the principles of mutual benefit, prioritize national interests and from the start avoid retaliation measures that can actually harm Indonesia.
"By continuing to prioritize or pay attention to basic things, such as job creation, as well as economic growth, sustainable development, strong macroeconomic and also healthy state budget," he explained.
Another strategy facing Trump's tariff is to expand the potential of the export market by diversifying manufacturing industry products.
"And another strategy is to expand the global market while strengthening the domestic market. So, this domestic market is very important because 70-80 percent of our output from manufacturing is absorbed domestically," he said.
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In addition, Agus said, Indonesia also strengthens cooperation with traditional trading partners, such as China, Southeast Asian countries, East Asian countries to the European Union.
The government will also finalize trade agreements such as the Indonesia-European Union Comprehensive Economic Partnership Agreement (IEU-CEPA).
"Because this opens up opportunities for textile products, footwear products and so on to enter the markets of countries in Europe, EU member countries," he concluded.
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