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HOW WAR TRADE US - CHINA AFFECTS INDONESIA'S EXPORT FOR TEXTILE AND CLOTHING

Jakarta July 2017


Donald TrumpDonald Trump, President of United States of America

Donald Trump's government policy for protecting the steel and aluminum industry in the country by applying tariffs by 25% for steel and 10% for aluminum products has caused various response to a number of countries including the European Union, Mexico and Canada. As reported from the US Department of Commerce, Trump will evaluate all trade agreements with other countries that have been made with previous governments. Trump's policy has received widespread protests because it is feared that it will disrupt the world economy.


The European Union reciprocated by imposing a counter rate for the export of American products to the European Union including American garments. Meanwhile, the US Department of Commerce's (USTR) investigation carried out on a number of products from China since August 2017 considered the country to have carried out unfair trade practices and resulted in the imposition of an additional 25% tariff on a number of products worth US $ 60 billion.


Chairman of Indonesian Textile Association of Greater Jakarta (BPP API DKI) Ir. Irwandy MA Rajabasa believes that the current trade war between the United States and China and the European Union is not good for the world economy. But hr continued saying that this will not affect the performance of exports of Textile and Textile Products from Indonesia to the world market especially in the US and European Union.


According to him, textile and textile products from Indonesia no longer get GSP facilities for access to American market. As is known in April 2018 the US government reviewed the GSP facilities provided to Indonesia, India and Khazastan because according to Trump's government the three countries had problems with market access for American products.


On the contrary, this moment could have made Indonesian Textiles and Textile Products more competitive in the American market because recently or precisely on July 10, 2018 the US Department of Commerce again made a follow-up list for Chinese products which would be subject to a 10% additional duty for a number of products whose exports to America in 2017 worth around US $ 200.


According to Irwandy, an additional 25% tariff on Chinese products which was effective on July 6, 2018 does not include textiles and textile products but on the list of follow-up products subject to an additional 10% tariff includes a lot of textiles ranging from cotton fiber, yarn, fabric, clothing, hats to bags and footwear. This tatiff applied by the United States as after holding China talks they still don't want to improve their unfair trading practices, the market tends to be closed and related to copyrights. China even retaliated by charging a 25% return on 545 US products worth US $ 34 billion.


US is one of Indonesia's longstanding traditional textile and clothing markets and is still the main market although in recent years new markets in Asia, the Middle East, South Africa and Latin America have continued to grow.


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