By Pandu Setiabudi
The Ministry of Industry has raised concerns over the potential indirect effects of the United States’ decision to raise tariffs on steel and aluminum imports, warning that the move could lead to a surge of Chinese metal products entering Indonesia.
Deputy Minister of Industry Faisol Riza, speaking during a working meeting with Commission VII of the House of Representatives on Wednesday (July 2), said the direct impact on Indonesia would be minimal, as steel and aluminum are not key export commodities to the US.
“Indonesia’s steel exports to the US account for just 0.65%, while aluminum exports make up 0.54%. These are not our primary export products to the US,” Faisol stated.
However, he stressed the greater risk lies in the indirect consequences, particularly trade diversion and dumping of Chinese products into other markets, including Indonesia. The US currently imports about 25% of its steel (worth US$13.17 billion annually) and 10.9% of its aluminum (worth US$3.07 billion) from China. With these channels disrupted, surplus Chinese products could be redirected elsewhere.
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This poses a significant concern for Indonesia, which already relies heavily on imports of both materials from China.
“Currently, 51.4% of Indonesia’s steel imports come from China, valued at around US$2.17 billion. For aluminum, it’s 46.1%, or approximately US$1 billion. If the US market closes, these products could overflow into other countries—including Indonesia,” Faisol warned.
He cautioned that such a development could threaten the competitiveness of domestic producers, particularly if not mitigated by government action.
In anticipation, the Ministry of Industry plans to intensify monitoring at major entry points and is prepared to activate trade defense instruments, such as anti-dumping duties and safeguard measures, should there be an abnormal spike in import volumes.
“We will continue to monitor developments in steel and aluminum trade at our borders. A swift and decisive response is crucial to protect the sustainability of our local industries,” Faisol concluded.
Editing by Reiner Simanjuntak
