JAKARTA, RAKYAT NEWS – Indonesian business leaders have expressed concerns that the country could face a flood of Chinese imports due to the United States’ increased tariffs on Chinese goods. The worry is that China may redirect its exports to countries like Indonesia, potentially leading to a surge of cheaper goods flooding the market. However, the direct impact of the new US tariff policies on Indonesia is expected to be relatively small.

Yukki Nugrahawan Hanafi, Chairman of the ALFI Institute and head of the Indonesian Logistics and Forwarders Association (ALFI), stated that although Indonesia has a trade surplus with the US, the impact of the new tariff policies would be minimal at first. Still, he warned both the government and business sector to be cautious of potential ripple effects, including possible tariff hikes. “There’s a risk that Chinese goods, with much more competitive prices, could flood the Indonesian market,” he told Katadata.

Interestingly, he believes the increased US tariffs on Southeast Asian countries, particularly Vietnam, could have a positive impact on Indonesia. With supply chains shifting away from Vietnam due to higher tariffs, Indonesia could position itself as an alternative investment and production hub. Products like electronics, textiles, footwear, and furniture, which are commonly exported by Vietnam, are most likely to be affected. This shift presents an opportunity for Indonesia to strengthen its position as a more competitive and efficient supply chain center.

Yukki urged the government to act quickly by improving the ease of doing business, streamlining licensing procedures, enhancing logistics and infrastructure efficiency, and creating a more conducive business climate. These actions could help Indonesia capture opportunities arising from the relocation of businesses from countries hit by higher US tariffs, including Vietnam, Laos, Cambodia, and Thailand.

However, Andry Satrio Nugroho, Head of the Industry, Trade, and Investment Center at INDEF, considers the additional 32% tariff imposed by the US on Indonesian products to be a serious threat. He criticized the US’s justification for imposing up to 64% tariffs on Indonesian products, arguing that the calculation was flawed. “The method used to calculate the tariffs is erroneous, yet it’s being used as a pretext to exert pressure on Indonesia. This is a blatant form of protectionism,” Andry remarked.

This tariff hike directly impacts Indonesia’s main export sectors, particularly textiles, clothing, and footwear, which contribute about 27.5% of the total exports to the US. Strategic commodities such as palm oil and rubber are also affected. Andry further warned that the high tariffs could threaten millions of jobs dependent on these sectors. “If the government remains passive, we risk losing a key market and facing a much larger wave of layoffs,” he added.

As the global trade environment shifts, Indonesia faces both challenges and opportunities, and its response to these changes could have significant implications for its economy.(Uki Ruknuddin)