TEMPO.CO, Jakarta - President of the United States Donald Trump has announced a 32 percent import tariff on Indonesian products. Achmad Nur Hidayat, an economist and public policy observer at UPN Veteran Jakarta, warned that the policy could result in large-scale layoffs in Indonesia's textile industry.
Achmad described the tariff move as a sign of failed negotiations, predicting long-term damage to the national economy. "The textile and footwear industry, which employs more than 3.6 million workers, will be severely affected," he said in a written statement on Tuesday, July 8, 2025.
He noted that U.S. importers are likely to divert production contracts to countries like Thailand, Vietnam, or Cambodia, where export tariffs are lower.
"This means a threat of increased mass layoffs, which will raise unemployment and reduce people's purchasing power," he added.
The United States currently absorbs over 10 percent of Indonesia’s non-oil and gas exports. Achmad said the tariff hike would likely reduce export volumes, suppress foreign exchange earnings, and increase volatility in the rupiah exchange rate.
Concerns over mass layoffs in the sector have been growing since Trump first announced reciprocal tariffs in April 2025.
Indonesian Textile Association (API) Chairman Jemmy Kartiwa Sastraatmaja said the government must respond by ending import relaxations to prevent an influx of finished goods that could further harm the domestic market.
"If Indonesia fails to control the surge of imported goods, layoffs in this textile industry will continue," Jemmy said during a virtual press conference on Friday, April 4, 2025.
On July 7, Donald Trump informed President Prabowo of the tariff rates that would be applied to imported products from Indonesia. In his letter, he stated that beginning August 1, 2025, a 32 percent tariff would be imposed on all Indonesian goods entering the United States, in addition to existing sectoral tariffs.
He also remarked that the 32 percent rate was still relatively modest compared to what he considered necessary to offset the trade deficit between the two countries.
Editor's Choice: US Dollar Weakens as Markets Brace for Trump's Tariff Hike
Click here to get the latest news updates from Tempo on Google News
Iran Rebuffs Trump's Claim of Meeting Request Amid Escalating Tensions
19 menit lalu
Iran has denied U.S. President Donald Trump's statement on Tuesday, regarding Iran's request for a meeting to discuss Tehran's nuclear program.
Today's Top 3 News: 3 Efforts to Ensure Safe Climbing on Mount Rinjani
3 jam lalu
Here is the list of the top 3 news on Tempo English today.
Trump Warns Prabowo Against Retaliatory Tariffs
3 jam lalu
U.S. President Donald Trump has cautioned Indonesia against imposing retaliatory tariffs in response to the 32% reciprocal tariff he has implemented.
US Dollar Weakens as Markets Brace for Trump's Tariff Hike
4 jam lalu
Currency analyst Ibrahim Assuaib said several global factors contributed to the US dollar's decline, which in turn supported the rupiah.
Israeli PM Netanyahu Nominates Donald Trump for Nobel Peace Prize
4 jam lalu
Israeli Prime Minister Benjamin Netanyahu announced on Monday that he had nominated Donald Trump for the Nobel Peace Prize.
Indonesia's Finance Ministry Addresses Trump's 32% Tariff, Says Talks Ongoing
4 jam lalu
Finance ministry says Airlangga Hartarto is expected to arrive in Washington D.C. on Tuesday, July 8, local time, to discuss the tariff.
China Threatens Retaliation on Supply Chain Deals as Trump Announces New Tariffs
5 jam lalu
China has warned the Trump administration not to reignite trade tensions by reintroducing tariffs on its goods next month.
TikTok Developing New U.S.-Specific App Ahead of Planned Share Sale
5 jam lalu
TikTok is reportedly preparing a new version of its app specifically for users in the United States (US) ahead of plans to sell its shares to a group of investors.
Indonesia's Airlangga Hartarto Flies to U.S. to Negotiate Trump's 32% Import Tariff
5 jam lalu
Trump's letter announcing a 32 percent tariff starting August 1 prompted Minister Airlangga to fly to the U.S. from Rio after the BRICS Summit.
List of Southeast Asian Countries and Their Trump-Imposed Tariffs
6 jam lalu
While Rubio is about to make his first visit to Asia, Trump announced tariffs on several Southeast Asian countries, including Thailand and Indonesia.
