TEMPO.CO, Jakarta - The move by the United States (US) government to impose a 32 percent tariff on Indonesian products will directly impact the textile and garment industry in the country. Especially since President Donald Trump has set the new tariff to take effect on August 1, 2025.

The Executive Director of the Indonesian Textile Association (API), Danang Girindrawardana, said that business owners still hope that the US government will lower the tariff. If not, entrepreneurs need to seek new export markets.

"The risk is that we (business owners) have to make trade maneuvers to non-American countries. One of the biggest challenges is shifting the market to other countries. That's the challenges," he said when contacted by Tempo on Tuesday, July 9, 2025.

According to Danang, redirecting exports to other countries is a possible scenario if Indonesian products are affected by the tariff increase, as the prices of Indonesian products become less competitive compared to those of other textile-producing countries. However, shifting the export destination is not easy and cannot be done quickly. "Building a new market with other countries takes at least one year," said Danang.

Currently, the American market can absorb up to 40 percent of textile products from Indonesia. The Council of Experts of the Indonesian Employers' Association (Apindo) considers this percentage to be very high. Now, entrepreneurs have to put their thinking caps on to compensate for or redirect this portion to other potential countries if import tariffs rise.

The problem is that the export markets of other countries are not as large as that of America, so many new markets need to be created. "This is so that in total it can approach the size of the American market," he said again.

Another alternative that can be done is to rely on the domestic market. However, at present, the Indonesian market is already full of imported finished goods, especially illegal ones.

Because of this, API urges the government to immediately enact protective policies that can be issued in two forms, namely non-tariff barriers or tariff barriers. "These protective policies will reduce the influx of foreign goods entering Indonesia, especially finished products," he said.

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