Kadin deems 19 per cent reciprocal tariff for Indonesia competitive

Jakarta (ANTARA) — The Indonesian Chamber of Commerce and Industry (Kadin) has assessed the 19 per cent reciprocal tariff under the planned Agreement on Reciprocal Trade (ART) between Indonesia and the United States as competitive, with the potential to enhance national export competitiveness.

Kadin chairman Anindya Bakrie, in a statement received in Jakarta on Friday, said the tariff scheme sends a positive signal to the business community, particularly as a number of products stand to receive tariff exemptions if they incorporate US-made components.

“The 19 per cent tariff is already competitive. Moreover, our export products that use components from the United States could see tariffs reduced or even eliminated entirely. This is very interesting, but the details need to be studied carefully,” Anindya said.

He added that business operators need to scrutinise the technical provisions of the ART in detail to optimise its benefits, particularly for the manufacturing sector and value-added industries.

According to Anindya, a number of industry associations have already begun exploring concrete cooperation opportunities with US partners, including schemes for importing raw materials to be processed in Indonesia before being re-exported with added value.

“Earlier I spoke with one of the leaders of the Indonesian Furniture and Handicraft Industry Association (HIMKI) who is here. They want to talk with their counterparts to explore what can be imported from the United States, processed here, and then shipped back to the US with added value,” Anindya said.

He considered this scheme to be aligned with the downstream processing agenda and efforts to boost national export competitiveness.

“If the demand comes from the United States, it certainly makes sense, especially if the tariff is zero,” he added.

Kadin also expressed support for the government’s economic diplomacy in strengthening trade and investment relations between Indonesia and the US.

During the series of events accompanying President Prabowo’s visit to the US, 11 memoranda of understanding worth US$38.4 billion were signed between Indonesian and American business operators across various sectors, including mining, energy, agribusiness, textiles and garments, furniture, and technology.

Anindya assessed that these steps could strengthen Indonesia’s position in the global economy whilst maintaining good relations with the US as one of the country’s principal trading partners.