Trade Minister Enggartiasto Lukita has said that Indonesia will prepare a retaliatory policy if the United States moves forward with its plan to impose tariffs on 124 products imported from Indonesia as part of its effort to reduce the trade deficit between the two countries.
However, to prevent the US from imposing tariffs, he said that the Indonesian government and the Indonesian Embassy in Washington would first pursue a soft approach to explain that the trade deficit was not caused by the export of products listed in the Generalized System of Preferences (GPS).
“Our ambassador has carried out a [soft] approach. I myself had communicated with the US because, basically, we do not want a trade war because it will cause losses to all parties. We prefer collaboration,” Enggartiasto said in Jakarta on Thursday as reported by kompas.com.
“But if we continue to receive pressure, we will [retaliate]. It could be like the [current trade dispute] between the US and China. The impact could be global.”
The minister acknowledged that the US was in the process of evaluating Indonesian products listed in the GPS, a trade system that was designed to promote economic growth in developing countries by providing preferential duty-free entry.
The chairman of the Indonesian Employers Association’s (Apindo) advisory council, Sofjan Wanandi, said at a post-Idul Fitri gathering on Thursday that US President Donald Trump had warned the Indonesian government about the country’s trade deficit.
If the US continued with its plan, a number of Indonesian products exported to the country, like textiles and the textile products, would be affected, Sofjan said.