TEMPO.CO, Jakarta - The Indonesian Employers' Association (Apindo) has formulated several proposals to the government to minimize the impact of the implemented import tariffs from the United States. The Chairperson of Apindo, Shinta Widjaya Kamdani, stated that the government needs to act quickly to anticipate potential international trade congestion due to the implemented reciprocal import tariffs of 32 percent for Indonesia.
Shinta proposed that Indonesia and the U.S. create supply chain integration to support the needs of the Indonesian industry and the industry in the U.S. "Thus, Indonesian exports are seen as an effort to make U.S. industry more competitive, not a threat, he said," Shinta explained the purpose of uniting the industrial supply chain when contacted by Tempo on Sunday, April 6, 2025.
Shinta views the strategy that drives bilateral agreements as ensuring Indonesia obtains the best market access to the United States. In addition, Apindo also encourages thematic approaches, such as cooperation in the energy, critical minerals, and pharmaceutical sectors, without having to go through complex trade agreement negotiations.
Furthermore, Shinta's second proposal is for the government to evaluate the comprehensive implementation of reciprocal principles. The reevaluation must still take into account the tariffs and non-tariff barriers on imports from the U.S. to Indonesia. "In order to create balance and fairness in the trade relations of both countries," said Shinta.
In addition to striving for smooth access to the U.S. market, Shinta emphasizes the importance of diversifying Indonesia's export destinations. Shinta mentioned that countries in ASEAN, the Middle East, Latin America, and Africa have great potential as alternative markets. Expanding the market is useful for maximizing national exports and ensuring industry stability despite facing obstacles such as restrictive Trump import tariffs.
"We also encourage the government to maximize existing trade agreements, such as FTAs/CEPAs, and to expedite the completion of agreements still under negotiation, such as the Indonesia-EU CEPA," said Shinta, continuing the third recommendation.
Finally, Shinta wants the government to support revitalizing labor-intensive industries and deregulate to make Indonesian products more competitive in the export market. She mentioned that several sectors dependent on the U.S. market will experience changes in production costs and are at risk of being marginalized domestically.
These sectors include textiles, footwear, furniture, electronics, coal, processed nickel products, and agribusiness. "Adaptive policy reforms that support the industry must be continuously strengthened to ensure that Indonesian products remain globally competitive," said Shinta regarding the fourth proposal.
She hopes the government collaborates with industry players to stabilize the national business climate in the face of the trade war. "Economic resilience can only be maintained if the response to external challenges is collectively built, measured, and based on close dialogue between the government and business players," said Shinta.
U.S. President Donald Trump announced last Wednesday, April 2, 2025, a minimum 10 percent increase in tariffs on many countries worldwide for goods entering the country, including Indonesia. According to the White House's Instagram post, Indonesia ranks eighth on the list of countries affected by the U.S. tariff increase, with a rate of 32 percent.
Approximately 60 countries will be subject to reciprocal tariffs of half the rates they impose on the U.S. Based on the list, Indonesia is not the only country in Southeast Asia affected by U.S. trade. In addition, tariff increases of 24 percent, 49 percent, 46 percent, and 36 percent were imposed in Malaysia, Cambodia, Vietnam, and Thailand, respectively.
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