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View all search resultsDomestic concerns loom as businesses cheer on US-RI deal
Some economists have flagged potential risks, particularly for foreign investors and manufacturers operating in the country, with the influx of duty-free products from the US.
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Visitors look at a textile machine during an international textile exhibition in Sawah Besar, North Jakarta, on March 23, 2024. (Antara/ Akbar Nugroho Gumay)
L
ocal businesses welcomed a new trade deal with the United States that slashes a proposed ‘reciprocal’ tariff from 32 percent to 19 percent, saying the outcome is more favorable than what regional peers face.
Shinta Kamdani, chairwoman of the Indonesian Employers Association (Apindo), stated that the result was “a far better result than the initial proposal” and would help keep Indonesia’s key exports competitive in the US market.
“There’s perhaps still room for further negotiation for a lower rate,” she told The Jakarta Post on Wednesday, noting that Indonesia must closely monitor how other countries fare in their own talks with Washington, as changes in the regional tariff landscape could “reshape the competitive dynamics in the near future.”
Saleh Husin, deputy chairman for industry at the Indonesian Chamber of Commerce and Industry (Kadin), echoed Shinta’s statement, noting that the newly agreed upon levy was “more favorable” than those faced by regional peers, which gave Indonesia a “slight competitive advantage” against other Southeast Asian nations.
Countries in the region saw adjustments to tariffs looming over their US-bound exports through letters Trump sent last week: Malaysia’s rate rose slightly to 25 percent, while Laos, Myanmar and Cambodia saw cuts to 40 percent, 40 percent and 36 percent, respectively. Thailand’s rate remained unchanged at 36 percent.
Vietnam, meanwhile, made a deal with the US that has seen its tariff rate slashed from 46 percent to 20 percent.
Private lender BCA chief economist David Sumual flagged potential risks, particularly for foreign investors and manufacturers operating in the country.
