Indonesia increases import tax on textiles and footwear to protect domestic products

Indonesia will impose tariffs of 100% to 200% on imports of everything from footwear to ceramics to protect domestic industries. Cheap imports are hurting many industries in Indonesia, especially the textile industry, which has forced hundreds of thousands of workers to quit.

The Indonesian Trade Ministry said the tariffs would be implemented soon and could affect imports of footwear, clothing, textiles, cosmetics and ceramics. The Indonesian Trade Protection Committee is investigating to determine the tariff level.

Southeast Asia’s largest economy introduced regulations late last year to tighten oversight of more than 3,000 imported items ranging from food ingredients to electronics to chemicals. However, the regulations were revised after the domestic industry complained that the regulations were hampering the flow of imported materials needed for domestic production.

Indonesian Trade Minister Zulkifli Hasan also announced that the country will soon impose import tariffs of up to 200% on Chinese goods to reduce the impact of the ongoing trade war between China and the United States.

He explained that the trade war is causing oversupply in China, forcing exports to other markets such as Indonesia. The US can impose a 200% tariff on imported ceramics or clothing; so Indonesia can do the same to ensure the survival and development of domestic small and medium enterprises. Tariffs on Chinese-made products will range from 100% to 200%. This policy will take effect after the relevant regulations are issued.

Indonesia’s textile industry is facing a number of challenges, partly due to a flood of Chinese textile imports over the past two years. As of June this year, 21 textile factories had closed and hundreds of thousands of workers had lost their jobs.