Govt to raise import duty on steel-related products

Govt to raise import duty on steel-related products

Adianto P. Simamora, The Jakarta Post, Jakarta

The government is planning to increase import tariffs on steel-
related products to help protect local industries from cheaper
imported products, according to an official.

"We are studying the possibility of 'harmonizing' the (import)
tariff in the upstream and downstream industries," Subagyo,
director general for metal, machinery, electronic and
miscellaneous industries at the Ministry of Industry and Trade,
said on Monday.

"In principle, import tariffs in the downstream sector should
be higher than those in the upstream," he added.

The down stream industry produces steel-related products such
as pipes. The import tariffs on downstream products currently
range from between 5 percent and 10 percent.

Meanwhile, the upstream industry produces steel products like
hot-rolled coils (HRC) and cold-rolled coils (CRC). The
government recently raised the import tariff on HRC and CRC to 20
percent and 25 percent, respectively, from 5 percent and 10
percent.

Many players in the downstream industry have long called on
the government to make a structured tariff policy for the
domestic steel industry.

the Association of Indonesian Steel Pipe Manufacturers
(Gapipa) had proposed a higher import tariff of up to 35 percent.

Indonesia imports steel from Japan, South Korea and China.

According to one estimate, in 2000, the world's total steel
output reached 828.5 million tons, compared with a total
consumption of 812 million tons. This means that there was an
oversupply of about 16 million tons.

This situation forced many giant producers to dump their
products in other markets outside the U.S., including Indonesia.