Indonesia Launches ‘Tariff War’ With China! Rates Soar to 200%! What China Feared Has Happened

Summary

Indonesia's Trade Minister, Zulki Hassan, announced safeguard tariffs of 100% to 200% on imports, including footwear and ceramics, to protect domestic industries from Chinese products flooding the market due to trade wars. This move is part of Indonesia's strategy to reduce reliance on China, as it strengthens economic ties with other nations, including Japan and the US, and engages in regional cooperation to address security challenges in the South China Sea.

Takeaways

• 📢 Indonesia's trade minister, Zukii Hassan, announced the imposition of safeguard tariffs ranging from 100% to 200% on various imported products to protect domestic industries.
• 🛡️ The Indonesian government is sending a warning to Chinese goods, indicating that they can impose the same high tariffs as the United States on ceramics or clothes to support local businesses.
• 🌐 Chinese products, affected by the trade war and shut out by Western countries, are now flooding the Indonesian market, prompting the government to draft new regulations.
• 🏭 The newly announced tariff policy will impact products such as shoes, clothing, cosmetics, and ceramics, and is part of Indonesia's strategy to gradually restrict the import of Chinese goods.
• 🔑 Indonesia is naming these tariff measures 'Safeguard measures import tax (BMTP)' and 'anti-dumping import tax (BMAD)', emphasizing their role in protecting domestic industries.
• 📈 Indonesia is actively promoting economic cooperation and trade with other countries to reduce reliance on China, strengthening ties with Asian countries like India, Japan, and South Korea, as well as with Europe and the United States.
• 🤝 Indonesian president-elect, Proo Subbiano, expressed a desire to strengthen the relationship with Japan, who agreed to provide patrol vessels and support in infrastructure and energy sectors.
• 📊 Investment from South Korean companies in Indonesia has increased significantly, with businesses like Hyundai and LG Electronics shifting their focus from China to Indonesia.
• 🌏 The United States and Indonesia have upgraded their relationship to a comprehensive strategic partnership, with cooperation in critical minerals, semiconductor supply chains, and climate issues.
• 💡 Microsoft and Apple are investing in Indonesia, with Microsoft training people in AI and Apple considering moving production lines to the country, highlighting Indonesia's growing economic importance.
• ⚓️ Indonesia is participating in regional cooperation organizations and addressing security challenges in the South China Sea, showing a firm stance in its relations with China and other regional players.

Q & A

What action has Indonesia announced regarding tariffs on imported products?

Indonesia announced that it will impose safeguard tariffs ranging from 100% to 200% on imported products such as footwear and ceramics, as a measure to protect domestic industries.

Why is Indonesia considering imposing such high tariffs on certain imported products?

Indonesia is considering high tariffs to protect its micro, small, and medium enterprises and industries from the influx of Chinese goods that have been shut out by Western countries and are now flooding the Indonesian market.

What is the impact of the trade war on Chinese products in Western countries as mentioned in the script?

The trade war has resulted in Chinese products being shut out by Western countries, leading to these products flooding the Indonesian market instead.

What measures is Indonesia taking to address the influx of Chinese goods?

Indonesia is drafting new regulations to address previous ones that were not stringent enough and is imposing safeguard tariffs on certain imported products.

What are the high-sounding names given to Indonesia's tariff measures?

The tariff measures are named Safeguard measures import tax (BMTP) and anti-dumping import tax (BMAD).

What is the purpose of BMTP according to the Indonesian Finance Minister?

BMTP is a national tax measure aimed at preventing domestic industries from facing severe damage due to a significant increase in imported goods.

How are Chinese enterprises reacting to Indonesia's move towards imposing tariffs?

Chinese enterprises are alarmed by Indonesia's move, as it could impact their business in a country that is a significant importer of their goods.

What economic strategy is Indonesia adopting to reduce reliance on China?

Indonesia is promoting economic cooperation and trade with other countries and regions, strengthening relations with countries like India, Japan, South Korea, Europe, and the United States.

What was the outcome of the meeting between Indonesian president-elect and the Japanese Prime Minister regarding their relationship?

They expressed their long-term friendship and cooperative relationship and agreed to further strengthen ties, particularly in economic cooperation and defense.

What is the significance of the Indonesia-US relationship upgrade to a comprehensive strategic partnership?

The upgrade signifies a new era in relations between the two countries, with a focus on economic cooperation, including on supply chain issues, and regular high-level meetings on various topics.

How is the 'China plus 1' strategy impacting Southeast Asian economies?

The 'China plus 1' strategy, aimed at diversifying manufacturing operations, is stimulating more investment in Southeast Asian countries, benefiting significantly from the shift in supply chains.

What steps are being taken by Indonesia to strengthen its maritime capabilities?

Indonesia is receiving patrol vessels from Japan and is considering enhancing its maritime capabilities through cooperation with the US and other countries.

What is the potential geopolitical impact of the South China Sea conflict on Indonesia and China's relationship?

A potential conflict in the South China Sea could severely test the relationship between Indonesia and China, as well as the regional order with ASEAN at its core.