Possible US tariff hike could hurt Indonesian exports. The government is bracing for a possible move by the US government to revoke preferential import tariffs on dozens of Indonesian export products.
The Trade Ministry’s international trade director general, Oke Nurwan, said in Jakarta on Sunday that undoing the tariff reduction would seriously affect Indonesian exports to the United States.
Indonesia currently enjoys a surplus in bilateral trade with the US, but the US government is evaluating 124 products imported from Indonesia that are currently listed in the generalized system of preference (GSP).
“Of course, it would affect our exports. Our products would be less competitive [in the country],” said Oke after attending a coordination meeting to discuss the impacts of a trade war between the US and China after both countries imposed import tariffs, as reported by kompas.com.
Tension between the two countries increased last Friday, when the US applied new tariffs to imported products from China worth US$23 billion. China retaliated by slapping tariffs on 545 products imported from the US worth $34 billion.
Oke said the ministers would again discuss the issue at a limited Cabinet meeting on Monday with President Joko “Jokowi” Widodo.
He added that about 10 percent of Indonesian products would be affected if the US went ahead with its plan to remove 124 products from the GSP list.
Indonesia has consistently recorded a trade surplus with the US. In 2017, Indonesia’s surplus amounted to $9.67 billion, 9.89 percent higher than the $8.84 billion surplus recorded in 2016. From 2013 to 2017, Indonesia’s surplus with the US grew at a rate of 8.47 percent per year.
Previously, Sofjan Wanandi, a special staff member to Vice President Jusuf Kalla, said the US had warned the government about Indonesia’s trade surplus with the world’s largest economy. Possible US tariff hike could hurt Indonesian exports (bbn, The Jakarta Post)