The Indonesian Furniture and Handicraft Industry Association (HIMKI) has outlined strategies to address the anticipated challenges posed by new US import tariffs. The tariffs, ranging from 10 to 20 per cent, are expected to be implemented by President Donald Trump's administration, which takes office on 20 January 2025.
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Currently, the United States accounts for 52 per cent of Indonesia's furniture exports, valued at approximately US$1.3 billion annually. HIMKI's chairman, Abdul Sobur, expressed concern that the tariffs could undermine the competitiveness of Indonesian products, leading to decreased demand from US consumers and adversely affecting domestic industries.
To mitigate these challenges, HIMKI has initiated collaboration with the Indonesian government. Proposed measures include negotiating preferential trade agreements with the US, offering exporters incentives through reduced raw material import taxes, and rejuvenating production technologies to bolster efficiency. Sobur emphasised the importance of economic diplomacy, urging cooperation with Indonesia's Ministry of Trade and Ministry of Foreign Affairs to establish new market access while tackling trade barriers.
Sobur stated that the government's involvement is crucial to safeguarding Indonesia's labour-intensive furniture and handicraft industries, which significantly contribute to the national economy. He also stressed the importance of diversifying export markets to reduce dependence on the US and Europe. Developing markets such as India, China, and the Middle East are key focus areas, with HIMKI hosting exhibitions in these regions over the past two years to create new opportunities.
Additionally, HIMKI is reinforcing the domestic market through initiatives like the Domestic Component Level programme. The association believes the domestic sector holds untapped potential, particularly through government support for local products. Technological rejuvenation and productivity enhancements remain pivotal, with Sobur urging the government to provide subsidies to ensure competitiveness.
In a related development, Indonesia has signed a comprehensive partnership agreement with Canada, paving the way for increased trade and investment. The agreement, concluded after two and a half years of negotiations, aims to enhance market access for Indonesian goods in Canada and foster bilateral cooperation across sectors such as agriculture, clean technology, and infrastructure.
The Indonesia-Canada trade relationship has experienced steady growth, rising by 11.24 per cent over the past five years to reach US$3.4 billion in 2023. Indonesian exports to Canada include telephone sets, natural rubber, and suitcases, while imports comprise wheat, fertilisers, and wood pulp.
Meanwhile, Indonesian Coordinating Economic Affairs Minister Airlangga Hartarto highlighted the nation's appeal to US investors at a roundtable hosted by the US-ASEAN Business Council in Washington. He reaffirmed Indonesia's commitment to fostering economic collaboration with the US under President Prabowo Subianto's administration, which aims for ambitious annual economic growth of eight per cent.
Despite the challenges, HIMKI remains optimistic about sustaining the global competitiveness of Indonesian furniture and handicraft products through collaborative efforts between industry players, the government, and international partners.
Source: www.sarawaktribune.com