Jakarta. Indonesia’s labor-intensive industries such as textiles, footwear, and furniture risk losing global competitiveness due to the United States’ reciprocal tariff policies, according to the Indonesian Employers Association (Apindo).

Apindo chairwoman Shinta Kamdani said Tuesday that the sectors most vulnerable to the US tariffs are those reliant on large labor forces, as these industries contribute significantly to Indonesia’s export market.

She argued that the Trump-era tariffs might not be overly concerning if Indonesia were treated equally with other countries. The real issue is that Indonesian products face tariffs of up to 32 percent, which is much higher than tariffs imposed on neighboring countries like Vietnam and Malaysia.

Such discrepancies could undermine Indonesia’s competitiveness, especially in labor-heavy sectors.

“Vietnam is one of Indonesia’s biggest competitors in labor-intensive industries, such as footwear. If Vietnam faces a tariff of only 20 percent, they have a clear advantage in capturing Indonesia’s export market share in the United States,” Shinta said during a visit to B-Universe Media Holdings headquarters in Pantai Indah Kapuk 2, Tangerang.

According to her, a drop in Indonesia’s exports could trigger a domino effect, including mass layoffs, particularly in the textile industry, which maintains a substantial presence in the US market.

Another consequence of the US tariffs, Shinta added, is the increased risk of China redirecting surplus goods to Indonesia -- one of the world’s largest consumer markets -- through dumping practices.

High US tariffs could also contribute to greater exchange rate volatility for the rupiah and rising prices for imported industrial raw materials.

“We need stronger support for labor-intensive sectors because they are already under pressure,” Shinta said. “We’ve asked the government to provide both fiscal and non-fiscal incentives to help keep our products competitive.”

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