The Indonesian government plans to impose import tariffs of up to 200% on Chinese products. This measure is a response to the US-China trade war, which has led to an oversupply of Chinese goods in international markets, including Indonesia.
The trade conflict between the United States and China has resulted in an excess of unsold goods in Western countries. Consequently, China has redirected its exports to other countries, including Indonesia. This influx threatens small and medium-sized enterprises (SMEs) in Indonesia, which are struggling to compete with the low prices of Chinese products.
In response, the Indonesian government is taking action. Minister of Trade Zulkifli Hasan announced plans to implement high import tariffs (between 100 and 200 percent) on Chinese products, as reported by Antara. These high tariffs are expected to rebalance the trade deficit and promote the growth of local industries.
This policy will come into effect once the relevant regulations are issued, continuing the government's efforts to tighten import controls. The new tariffs will soon apply to imports of products such as footwear, clothing, textiles, cosmetics, and ceramics. According to Reuters, the Indonesian Trade Safeguard Committee is working on determining these tariffs.
Last year, Indonesia imposed import quotas on up to 3,000 products, including food, footwear, electronics, and chemicals. However, these regulations had to be revised due to complaints from Indonesian companies about supply chain obstacles making it difficult for industries to obtain necessary imported materials.
According to The Diplomat, the Indonesian government is concerned that the influx of Chinese imports could threaten 64 million SMEs in Indonesia. Thus, the government is striving to protect the domestic economy through subsidies, export bans, and other measures.
Additionally, the Indonesian government has a history of market intervention to keep staple goods' prices stable and affordable through various policies, including Domestic Market Obligations and banning e-commerce transactions on social media. While these new tariffs may balance domestic and international economic priorities, mutually beneficial bilateral relations between Beijing and Jakarta are expected to remain stable.
