Responding to Trump's Tariff Policy, Furniture Industry Players Urge Government to Take Concrete Steps

JAKARTA, KOMPAS – The Indonesian Furniture and Handicraft Association, or HIMKI, considers the latest decision by U.S. President Donald Trump to increase import tariffs on Indonesian export products to the U.S. by up to 32 percent as a major challenge for the national furniture and handicraft industry. This policy is believed to have a significant impact on the competitiveness of Indonesian products in the U.S. market, which has long been one of the primary export destinations.

"The government needs to promptly respond to this policy with concrete steps, including holding direct discussions with industry players to formulate the best negotiation strategy in Indonesia-U.S. trade relations. Moreover, Indonesia is now included in the 'Dirty 15' list—a group of countries with a high trade surplus against the U.S.—which is subject to higher import tariffs as part of the U.S. reciprocal trade policy," said HIMKI Chairman Abdul Sobur when contacted in Jakarta, Friday (4/4/2025).

As an association managing the downstream sector of the national furniture and craft industry, HIMKI has expressed this concern to the government for more than a month, particularly through the Ministry of Trade during the IFEX event. "In fact, on March 7, 2025, we had a direct discussion with the Director General of Foreign Trade, Mr. Budi Santoso, to anticipate its impact," said Sobur.

The increase in tariffs will raise the export costs of Indonesian furniture and handicraft products to the US, potentially reducing competitiveness and slowing the growth of our exports in that market.

HIMKI identifies at least five main impacts and steps that need to be taken immediately. First, the potential decline in exports. "This tariff increase will raise the export costs of Indonesian furniture and craft products to the U.S., which could potentially reduce competitiveness and slow down the growth of our exports in that market," he said.

Second, competition with other countries. Following the implementation of tariffs on April 9, buyers in the U.S. are likely to seek alternatives from other countries with lower tariffs, such as Vietnam or countries that have preferential trade agreements with the U.S.

Third, high-level negotiation and lobbying strategies. HIMKI will continue to encourage the government to negotiate with the United States to mitigate the impact of this policy. "In addition, we will also directly approach buyers in the United States to maintain demand for Indonesian products," he stated.

Fourth, market diversification. To reduce dependence on the U.S. market, Indonesia's furniture industry must accelerate its expansion into alternative markets, such as the Middle East, Asia (India, China, Korea, Japan), Australia, New Zealand, and Africa. In fact, exports to China can be targeted for products that are not manufactured in that country.

"Five, production efficiency and innovation are the most likely initial steps we will take. With the increasing cost of exports, the national furniture industry must be more efficient in production and innovate in design and technology. We encourage the government to provide support in the form of technology subsidies and rejuvenation of production equipment so that the industry remains competitive," said Sobur.

The next step for HIMKI is to analyze further impacts on the national furniture and craft industry and immediately formulate a strategy with the government and industry players to face this challenge," said Sobur.

Meanwhile, Head of the Presidential Communications Office Hasan Nasbi revealed that the government has prepared a number of steps to deal with the 32 percent reciprocal tariff from the US. The first step is to calculate the impact of the reciprocal tariff implementation. Not only that, a high-level lobbying team to increase the competitive aspects of domestic products is also being prepared.

"In parallel with that, the government is also sending a high-level lobbying team to negotiate with the US Government. Domestically, the government is also implementing regulatory simplification so that Indonesian products can be more competitive," said Hasan, via his written message.