Indonesia studying impact of US tariff war on labor-intensive works

Jakarta (ANTARA) - The Indonesian government is assessing the potential impact of the United States tariff war on domestic labor-intensive industries, particularly those focused on textile and shrimp products.

Deputy Chairperson of the National Economic Council (DEN) Mari Elka Pangestu shared this information at a press conference on Indonesia's ongoing diplomatic measures against the US tariff policy in Washington, D.C., on Friday.

"We cannot be certain about what will happen in the next 30 to 60 days, as negotiations are still underway," she remarked during the online briefing followed from Jakarta.

Pangestu emphasized that the government had formulated several initiatives aimed at mitigating the adverse effects of the 32 percent tariff imposed on Indonesian products on the domestic employment landscape, including preparing the establishment of a task force dedicated to addressing layoff-related issues.

The instruction on the task force's formation was directly issued by President Prabowo Subianto during an economic forum held in Jakarta on April 8.

"I find it necessary to establish a layoff task force involving the government, labor unions, academics, rectors, BPJS (state insurance provider), and others. We need a task force as an anticipatory measure," he remarked at the forum.

The president’s directive came in response to a suggestion by Said Iqbal, president of the Indonesian Labor Unions Confederation (KPSI), who warned at the forum that approximately 50 thousand Indonesian workers could lose their jobs due to the new tariff Indonesia faces.

Additionally, the government has announced plans to establish another task force focused on deregulation, or simplification of rules that have been deemed as obstacles for investors, including those from the US.

On April 2, US President Donald Trump revealed a list of new, higher tariffs on products from various countries. However, a week later, he announced a postponement for most countries, including Indonesia, opening room for negotiations.