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View all search resultsUS tariffs put ‘significant pressure’ on RI industrial estates
Industrial estate managers say US import tariffs and anti-China trade policies are a burden on their business, forcing them to resort to operational and regulatory measures, as well as diversification, to ensure their global competitiveness.
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Holding its own: Electronics company PT Pegatron Technology Indonesia, pictured above, began operating plants in the Batamindo Industrial Zone in Batam, Riau Islands, in 2019. (JP/Fadli)
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ndustrial estate managers say United States import tariffs and anti-China trade policies are a burden on their business, forcing them to resort to operational and regulatory measures, as well as diversification, to ensure their global competitiveness.
Batam Free Trade Zone Authority (BP Batam) undersecretary for investment Fary Djemi Francis told The Jakarta Post on Friday that the 32 percent tariff the US plans to impose on goods shipped in from Indonesia would present “significant pressure” on Batam’s export industries, particularly electronics, furniture and solar panels.
Batam is home to dozens of industrial estates that host more than two dozen manufacturing industries, ranging from food and beverages to metals, all subject to BP Batam oversight as the government’s designated authoritative body.
Despite the pressure, Fary said, the tariffs “are not the end of the story [but rather provide] an opportunity for comprehensively reinforcing the industrial structure and the region’s strategy”.
Fary elaborated that the first of three steps BP Batam planned to take was to push downstream development further, since more advanced manufactured goods could increase margins by 20 to 40 percent, “which is enough to absorb the new tariff burden”.
Moreover, the region was seeking to expand the range of target countries for its products to minimize reliance on one or a small number of markets. The undersecretary said Batam was now actively trading with Australia, the United Arab Emirates (UAE), Japan, South Korea and Europe.
The third step was to reform the investment climate by making regulations more business-friendly and expediting procedures.
