Monique Handa Shafira, Jakarta – Chief Investment Minister Luhut Binsar Pandjaitan stated that the government's proposal to impose a 200 percent import tariff is not specifically targeting China. He noted that the policy is still under thorough review to ensure it aligns with the needs of domestic industries and international trade norms.
"We are not targeting any particular country, least of all China. All steps are taken based on our national interests," Luhut said in an official statement in Jakarta on Friday.
Luhut explained that in a meeting led by President Joko "Jokowi" Widodo on June 25, it was decided to protect domestic industries in accordance with prevailing regulations and international trade norms.
One measure taken is the implementation of a safeguard tariff or import duty safeguard (BMTP) for certain textile products, which has already been enforced. This BMTP applies to all imported goods without distinguishing their country of origin.
"I have also communicated with the trade minister to discuss this issue. We agreed to prioritize national interests while not neglecting partnerships with friendly countries," Luhut asserted.
Under President Jokowi's directives, Luhut has been tasked with tightening the monitoring of imports, especially regarding secondhand clothing or smuggled goods entering Indonesia. This measure aims to address the influx of secondhand clothes and smuggled items that could disrupt the domestic market.
The Indonesian textile industry has faced significant layoffs due to the influx of cheaper Chinese textiles. The Confederation of Indonesian Trade Unions (KSPN) reported nearly 50,000 job cuts in the textile industry by early June this year.
Luhut added that China remains one of Indonesia's most important strategic partners in terms of trade and investment. Indonesia is committed to maintaining good relations with China through communication and dialogue regarding policy steps between the two countries.
"We want to ensure that the good relationship between Indonesia and our partner countries continues to prioritize mutual trust, respect, and complementarity. I fully understand that a strategic partnership with friendly countries is one that mutually supports each other, especially in uncertain global situations like the handling of COVID-19," he concluded.
China is Indonesia's biggest trade partner, but the trade deficit with China in May 2024 nearly tripled to $1.3 billion, up from the $500 million deficit recorded in April, according to the Central Statistics Agency (BPS). The deficit was driven by imports of machinery, mechanical appliances, electrical machinery, equipment, and plastics.
Indonesia is considering imposing a 200 percent import duty on goods such as clothing, textiles, footwear, cosmetics, steel, electronics, and ceramics, citing challenges faced by domestic industries competing against cheaper imports.
President Joko summoned Industry Minister Agus Gumiwang to the Presidential Palace on Tuesday to discuss the proposed import duty. The minister said that President Jokowi has set a two-week deadline to finalize progress on the plan.
Source: https://jakartaglobe.id/business/luhut-200-pct-import-tariff-not-aimed-at-china-under-revie