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View all search resultsRI exporters worry about US demand as new tariff kicks in
Indonesian exporters are worried that new United States import tariffs will reduce demand for their products in the world’s largest consumer market, starting Tuesday.
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Workers load and unload containers on Feb. 4 at Tanjung Priok Port in Jakarta. (AFP/Bay Ismoyo)
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ndonesian exporters are worried that a new United States import tariff entering into force on Tuesday will reduce demand for their products in the US, even though the higher duty applies universally to goods shipped in from any country.
Asked whether exporters were concerned about a potential drop in demand from the US, Indonesian Exporters Association (GPEI) chairman Benny Soetrisno told The Jakarta Post on Tuesday: “Of course.”
Levies imposed on imports to the world’s largest consumer market have been in flux since April 2 last year, the day US President Donald Trump called “Liberation Day”.
The unsettled tariff regime introduced by Trump to try and balance out the county’s exports and imports includes a “baseline” tariff of 10 percent and a so-called “reciprocal tariff” that varies by the country of origin and is 19 percent for Indonesia under a bilateral trade agreement signed last Thursday.
However, Benny revealed that the effective rate placed on most goods shipped from Indonesia since last April was still the 3 to 7 percent range of the “old tariffs”.
To justify the sweeping duties, alongside the so-called reciprocal tariffs, Trump invoked the International Emergency Economic Powers Act (IEEPA) of 1977, which gives the head of state broad powers to regulate financial transactions upon declaring a national emergency.
Trump has argued that the “large and persistent” US trade deficit with the rest of the world is a national emergency. The US Constitution vests Congress with exclusive authority to issue tariffs, unless the legislature delegates that right to the executive branch through a law, hence Trump’s invocation of IEEPA.
