Here’s a breakdown of the provided text, focusing on the concerns raised by HIPMI and the government’s proposed strategies:
HIPMI’s Concerns about the Indonesia-US Tariff Agreement:
Unbalanced Negotiation Phase: HIPMI views the agreement as a sign that Indonesia is entering a phase of unequal negotiations with the US.
Disadvantage from Aggressive Strategies: HIPMI warns Indonesia to be cautious of being disadvantaged by the aggressive trade tactics of major global powers.
Negative Impacts on Industries:
Reduced Export Volumes: Tariffs could lead to a decrease in the amount of Indonesian goods exported to the US.
Disrupted Production Costs: the tariffs might make it less efficient for Indonesian businesses to produce goods.
Potential Job Losses: The economic impact of reduced exports and increased costs could lead to job losses.
Obstacles for MSMEs and New exporters: Tariffs pose critically important challenges for Small and Medium Enterprises (SMEs) and new exporters trying to improve their operations and enter the global market.
Vulnerability of Specific sectors: Industries with already thin profit margins, such as textiles, footwear, household electronics, and furniture, are particularly at risk.
HIPMI’s Proposed Strategies for the Indonesian Government:
- Export Market Diversification: Develop strategies to find new markets for Indonesian exports, reducing reliance solely on the US.
- expanded Export Incentives and Financing: Increase support, including financial assistance, for affected sectors, especially SMEs.
- renegotiate Fairer Trade Agreements: Boldly seek to renegotiate agreements to ensure reciprocity and economic independence, moving beyond being just a buyer of US products.
- Strengthen Domestic Production Ecosystem: Use the tariff agreement as an opportunity to boost domestic production, enabling Indonesia to export higher-value-added products, not just raw materials.
President Prabowo’s Stance and Government Actions:
Dissatisfaction with Negotiations: President prabowo admitted to being “tough” and dissatisfied with the outcome of the negotiations with Trump, aiming for zero percent tariffs.
Commitment to Equality and Non-Discrimination: Indonesia is committed to fighting for equal treatment and preventing trade discrimination.
Continued Dialog and Negotiation: Negotiations will continue to improve the trade balance.
Pursuit of Zero percent Tariffs: The government is actively negotiating for zero percent import tariffs on key commodities like crude palm oil, coffee, cocoa, and nickel.
Reciprocity and Equity in Agreements: The government emphasizes that trade agreements must be reciprocal and equitable, with both parties providing benefits and market access.
Trade Agreements as a Balancing Act: Trade agreements should aim to create a new balance that fosters national economic growth in line with global developments, not a win-lose scenario.
* Tariffs as a Protection Tool: Tariffs are seen as a tool to protect and allow domestic industries to grow and compete globally.
in essence, HIPMI is sounding an alarm about the potential negative consequences of the current tariff agreement, while the government, led by President Prabowo, acknowledges the challenges and is actively pursuing strategies to mitigate these impacts and achieve more favorable and equitable trade terms with the US.
