Economist from Universitas Muhammadiyah Yogyakarta (UMY), Faris Al-Fadhat, believes that the United States' decision to reduce Indonesia's import tariffs from 32 % to 19 % needs to be responded to carefully. Positively, this policy opens wider export opportunities to the US and can increase the competitiveness of domestic products in the global market. However, Faris also warned that the 0% tariff for American products in RI could flood the local market with cheap goods, potentially weakening the small and medium manufacturing sector that is not ready to compete on price and quality.
Furthermore, Faris criticized that the tariff reduction is more of a unilateral decision by the US, not the result of balanced bilateral negotiations, putting Indonesia in a weak bargaining position. He also mentioned the existence of trade “barter” clauses, such as bonds for the purchase of Boeing aircraft, which could have consequences for the trade balance and national economic sovereignty. In addition, he reminded that this policy is tentative and can change at any time-especially ahead of the implementation deadline on August 1, 2025-so the Indonesian government needs to prepare mitigation steps to face the volatility of this tariff policy.
