Ex-Trade Minister’s Advice on Facing US Import Tariff 32%
Jakarta, Indonesia – Indonesia must act fast to confront the US import tariff 32%, according to former Minister of Trade Muhammad Lutfi. In light of the United States’ decision to increase import tariffs on various goods, Lutfi has urged the government and exporters to strengthen competitiveness and diversify export markets.
“This isn’t just a trade issue; it’s a wake-up call for our manufacturing sector,” said Lutfi during an economic forum in Jakarta.
The 32% tariff, set to impact a range of Indonesian exports such as steel, aluminum, and certain manufactured products, could reduce national export volumes and disrupt business continuity. More details can be read on the USTR official page.
Boosting Local Industries Amid Tariff Pressures
To withstand the US import tariff 32%, Lutfi suggests that Indonesia must start from the inside—by strengthening local industries. This includes investing in industrial downstreaming, improving technology, and streamlining logistics.
Lutfi also called on the government to offer incentives for high-value export industries and support businesses in adopting ESG (Environmental, Social, and Governance) practices to remain competitive in global supply chains.
“Countries with strong domestic industries are the ones that survive shocks like this,” he said.
Diversify Export Markets Beyond the US
Relying heavily on a single export destination is a known vulnerability. According to Lutfi, Indonesia should aggressively expand to non-traditional markets in Africa, the Middle East, and Latin America. Trade deals like the Indonesia–EU CEPA and RCEP are crucial instruments to access wider markets.
The former trade minister also urged policymakers to optimize existing agreements such as ASEAN Free Trade Area (AFTA), which offer competitive advantages for regional exports.
Policy Clarity Needed to Attract Global Investors
In response to the US import tariff 32%, Lutfi believes Indonesia must show strong policy direction to attract foreign direct investment (FDI). Transparency in trade regulations, tax incentives, and clear industrial roadmaps will be key in convincing investors to shift supply chains to Indonesia.
He also warned that without urgent reforms, Indonesia risks being sidelined in global trade flows.
Conclusion: Turning Crisis into Reform Opportunity
Although the US import tariff 32% poses short-term challenges, it could be a catalyst for long-overdue structural reforms. Former Minister Lutfi’s advice offers a clear roadmap: improve competitiveness, diversify trade partners, and sharpen investment policies. With coordinated action, Indonesia can not only survive the tariff hike—but emerge stronger.