Alfida Rizky Febrianna, Jakarta – Indonesia may face another wave of mass layoffs within the next three to six months as global economic challenges, including escalating US-China trade tensions and new US import tariffs, weigh on domestic industries, a leading economist warned.

Tauhid Ahmad, Executive Director at the Institute for Development of Economics and Finance (INDEF), said early indicators of large-scale job cuts are already emerging. More than 24,000 workers have been laid off in early 2025, adding to the nearly 80,000 jobs lost throughout 2024.

"In situations like this, businesses usually spend the next few months reassessing strategies. They'll first exhaust warehouse inventories, then begin cutting costs, including labor," Tauhid said during an interview with Beritasatu TV's Investor Market Today on Monday.

He urged the government to act swiftly, pointing to signs of economic slowdown since last year that have already reduced key sector contributions to GDP.

"We're seeing stagnation, even decline, in sectors like automotive, electronics, and textiles. These are early signals that need to be taken seriously," he said.

Companies in these industries have reportedly begun workforce reductions quietly, with layoffs picking up after last year's Eid holidays. Tauhid expects the impact to become more visible in the second and third quarters of this year.

The warning comes as the United States ramps up its protectionist trade policies. In April, US President Donald Trump announced a sweeping 10 percent baseline tariff on all US imports, with plans to increase rates further for key trading partners, including Indonesia. While the tariff hikes were initially slated to take effect on April 9, they've been pushed back to July 9.

For Indonesia, the new US import duties could reach as high as 47 percent on certain products, comprising a 10-15 percent baseline tariff, a 32 percent reciprocal duty, and other trade adjustments. However, Washington has granted a 90-day grace period before imposing the reciprocal tariffs.

Source: https://jakartaglobe.id/business/trumps-tariffs-could-trigger-mass-layoffs-in-indonesia-indef-say