automotive

US Import Tariffs, This Is The Potential Impact On The National Automotive Industry

The Association of Automotive and Motorcycle Equipment Industries (GIAMM) predicts that the imposition of new import tariffs on various goods to the United States will have an impact on the domestic industry. Given that currently Indonesia's automotive component exports to the United States are in second place after Japan. So there needs to be a strategic step in responding to this situation. "Of course it will have a big impact on our industry, because previously the import tariff to the US was relatively small. Meanwhile, American products entering Indonesia are subject to much higher tariffs," said GIAMM Secretary General Rachmat Basuki in his statement, Sunday (6/4/2025). 

If there is no solution, Basuki highlighted the potential for a flood of automotive component products from China to the Indonesian market due to America's trade policy towards the Bamboo Curtain Country. 

"The problem now is that we import quite a lot of components from China but we can't export there," he said. "With China's high import tariffs there, they (China) will inevitably look for cheaper countries. They will automatically run to countries like us as their market share. So we have to protect it," said Rachmat. As a solution, GIAMM encourages the implementation of non-tariff barriers such as the Domestic Component Level (TKDN) policy and the Indonesian National Standard (SNI), to protect the national industry from the onslaught of imported goods. The association also proposed a reciprocal tariff approach as a fairer short-term solution. "If they impose high tariffs, we also need to adjust. Tariffs in return for tariffs. But don't forget other options such as lowering tariffs for US products to create balance," said Basuki. However, GIAMM remains optimistic that the American market can still be reached by domestic vehicle component business actors. 

"Despite the challenges, we remain optimistic. The American market is still open. As long as the tariffs imposed on China are not lower than ours, domestic producers still have the opportunity to compete," he said. Rachmat also encouraged the government to continue to strengthen trade diplomacy with partner countries and ensure that the national industry receives adequate protection. It is known that United States President Donald Trump has set new import tariffs for various goods that enter or are imported. Indonesia itself is subject to an import tariff of 32 percent. 

Tag: GIAMM National Automotive Industry US Import Tariffs