February 20, 2026 | 05:51 pm
TEMPO.CO, Jakarta - The Chair of the Indonesian Employers Association (Apindo), Shinta Kamdani, stated that labor-intensive industries are the most vulnerable sector affected by the reciprocal tariff with the United States. This is because labor-intensive sectors have a high exposure to the U.S. market.
"Based on export data, several commodities show significant dependency on the U.S. market," said Shinta to Tempo, as quoted on Friday, February 20, 2026.
She detailed that knitted clothing and clothing accessories accounted for approximately 61 percent of exports to the U.S., furniture and lamps around 59 percent, processed meat/fish/crustaceans around 56 percent, and leather products around 56 percent. Meanwhile, non-knitted clothing accounted for about 49 percent, toys and sports equipment around 45 percent, and footwear around 33 percent.
According to Shinta, these figures show that changes in tariffs directly affect orders, production capacity utilization, and company cash flow. She stated that this condition has the potential to affect labor absorption.
Shinta argued that to anticipate the impact of the tariff agreement, it is also important to consider the position of other countries in the region. With a reciprocal tariff of 19 percent, Indonesia is currently at the same level as Thailand, Malaysia, and the Philippines, which also fall within the 19 percent range.
"However, recent developments show that India is now at a lower level, around 18 percent; thus, from a headline perspective, India is slightly more competitive in terms of tariffs," said Shinta.
President Prabowo Subianto and President Donald Trump signed the Agreement on Reciprocal Trade (ART) document in Washington, D.C. on Friday morning, February 20, 2026, Indonesia time. In this ART document, 1,819 agricultural and industrial products receive zero percent tariffs or are exempt from tariffs when entering the U.S. These include palm oil, coffee, cocoa, spices, rubber, electronic components, including semiconductors, and aircraft components.
America will also implement a zero percent tariff on textile and apparel products through the Tariff Rate Quota (TRQ) mechanism. "Especially for Indonesian textile and apparel products, America will also provide a zero percent tariff with the tariff rate quota or TRQ mechanism," said Coordinating Minister for the Economy Airlangga Hartarto via a virtual press conference on Friday morning, February 20, 2026.
Ilona Estherina contributed to this article
Read: US Demands Indonesia to Lift Critical Mineral Export Restrictions
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