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Hit hard by tariffs, textile makers want to ramp up US cotton imports
Diversifying exports to countries beyond the US is unfeasible in the short term because of either limited market demand or intense competition from local players in target countries.
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Workers are pictured in a garment factory in Central Java in an undated photo. (Central Java Regional Government/-)
T
he textile industry is set to be among the hardest hit by the recent United States tariff hikes, with 40 percent of Indonesian textiles and apparel exports bound for the American market.
Industry players warn that the 32 percent so-called “reciprocal” tariff to be imposed on Indonesian goods once a 90-day suspension granted for bilateral negotiations ends could “accelerate layoffs” in a sector already struggling before the policy surfaced.
Textile industry associations have suggested increasing imports of raw materials like cotton from the US as a bargaining chip to balance bilateral trade and potentially lower the looming tariff, as well as protecting the domestic market by constraining imports.
Efforts to diversify Indonesian exports beyond the US are deemed unfeasible in the short term because of either limited market demand or intense competition from local players in target countries.
Indonesia, which recorded a $16.8 billion trade surplus with the US last year, has landed on a long list of countries facing steep tariff hikes. On April 2, US President Donald Trump announced a 32 percent tariff on Indonesian goods that took effect on Wednesday.
However, Trump reversed course on Wednesday, temporarily lowering duties for all affected countries to a “baseline” rate of 10 percent for 90 days, with the exception of slapping a staggering 125-percent basic tariff on imports from China.
Redma Gita Wirawasta, chairman of the Indonesian Filament Yarn Producers Association (APSyFI), said around 40 percent of the wider industry’s exports went to the US, mostly in the form of finished goods. Indonesia is currently the fifth-largest textile and apparel exporter to the US behind China, India, Vietnam and Bangladesh.
