Kadin urges MSMEs to leverage US-Canada tariff war for exports
The Chairperson of the Indonesia–Canada Bilateral Committee of Kadin Indonesia, Millie Lukerm, stated that the tariff war between the United States and Canada is opening a strategic window of opportunity for Indonesian exporters to enter North American market supply chains.
She noted that Canada is currently aggressively diversifying its trading partners outside the US. However, national business actors were reminded not to rely solely on import duty reductions, but must also anticipate stringent non-tariff barriers.
“Tariff exemptions will not be effective if business players, particularly in the MSME sector, stumble upon technical regulations at ports of entry,” said Millie during a webinar hosted by the Indonesian Chamber of Commerce Institute alongside the Canadian APF in Jakarta on Tuesday.
The US-Canada trade conflict has triggered reciprocal tariffs ranging from 15 to 50 per cent. This surge in tariffs is forcing Canadian importers to seek substitute products from partner countries that are currently finalising trade agreements, including Indonesia through the Indonesia-Canada Comprehensive Economic Partnership Agreement (ICA-CEPA) framework.
However, this momentum must be utilised immediately before both nations reach a new trade agreement.
Millie also highlighted the legal obligation for dual-language packaging labels (English and French), which are strictly enforced throughout Canada, a requirement that business players must understand.
Furthermore, the local business culture is highly conservative, as it relies on building relationships through face-to-face global business meetings and rejects trade offers sent via cold emails or WhatsApp messages.
Regarding distribution, the Chairperson of the Indonesia-Canada Chamber of Commerce (ICCC), Jim Webb, reminded exporters of Canada’s massive geographical expanse, such as extreme winter weather, and the differences in local regulations between the west and east coasts, which must be considered by Indonesian businesses.
“During winter, goods shipments must face extreme freezing temperatures of minus 30 to minus 40 degrees Celsius. This requires a specialised logistics chain that is entirely different from Indonesia’s tropical climate,” explained Webb.
To mitigate these risks, Kadin and the ICCC advise domestic business players to utilise official assistance channels, ranging from the Kadin Clinic programme and the Trade Commissioner Service facilities at the Canadian Embassy, to the Indonesian Trade Promotion Centre (ITPC) office in Vancouver.
These assistance programmes are expected to prepare and guide MSMEs to penetrate the Canadian market effectively and accurately.