The Indonesian government plans to impose import tariffs of as much as 200% on Chinese products. This motion is a response to the US-China trade war, which has led to an oversupply of Chinese goods on international markets, including in Indonesia.
The trade conflict between the United States and China has created a surplus of unsold goods in Western countries. As a result, China redirected its exports to other countries, including Indonesia. This influx threatens small and medium-sized enterprises (SMEs) in Indonesia as they struggle to compete with the low prices of Chinese products.
In response, the Indonesian government is taking motion. According to Antara, Trade Minister Zulkifli Hasan announced plans to introduce high import duties (from 100 to 200 percent) on Chinese products. These high tariffs are expected to offset the trade deficit and promote the event of local industries.
This policy will come into force once the relevant regulations are issued, continuing the federal government’s efforts to tighten import controls. The latest tariffs will soon cover the import of products akin to footwear, clothing, textiles, cosmetics and ceramics. According to Reuters, Indonesia’s Trade Defense Committee is working to set these tariffs.
Last 12 months, Indonesia imposed import quotas on as many as 3,000 products, including food, footwear, electronics and chemicals. However, these regulations needed to be revised because of complaints from Indonesian firms about supply chain obstacles making it difficult for industries to acquire crucial imported materials.
According to The Diplomat, the Indonesian government fears that the influx of Chinese imports could threaten Indonesia’s 64 million SMEs. Therefore, the federal government tries to guard the domestic economy through subsidies, export bans and other measures.
Additionally, the Indonesian government has a track record of market interventions to take care of stable and reasonably priced prices for essential goods through various policies, including domestic market obligations and a ban on e-commerce transactions on social media. While these latest tariffs may balance domestic and international economic priorities, the mutually useful bilateral relationship between Beijing and Jakarta is anticipated to stay stable.
