May 09, 2025 (MarketLine via COMTEX) --
The Indonesia Textile Association's vice chairman Anne Patricia Sutanto tells Just Style exclusively her government's discussions with the US on tariffs should lead to more transparency on import licensing, which will benefit its exports to all countries.
Sutanto, who is also the vice president of Indonesia garment manufacturing major PT Pan Brothers TBK, explains Indonesia's government went to Washington DC before Easter to discuss tariffs with the US Treasury, US Commerce and the United States Trade Representative.
She notes the conversations happened behind closed doors, however Indonesia's government has told its business sector, which includes the fashion and textile industry, that it is focused on closing the agreement with the US within 60 days from the day of the meeting.
She shares: "That's their aim," adding that "everything looks quite positive so far, but the decision, of course, is going to be with the US because it's about the goods the US imports".
Sutanto's overall positivity comes from Indonesia's deficit to the US not being that big relative to other countries in the region. She shares the difference is about $17bn, which she points out is "pretty low" compared to some of Indonesia's neighbours.
Plus, she says "some of the buying commitments can easily be done without hurting Indonesia's national balance sheet, so that's what the government needs to do first."
Sutanto suggests Indonesia's government does have some other homework to do, which is related to providing more transparency on import licensing, but she says that is understood.
She is quick to add that this is not just a US issue, it is something that will help Indonesia to progress with its agreements with other markets, including the EU.
"Once our government is more transparent on import licensing based on the request of the US, we will also solve the EU's request" and this will provide some "promising leeway" for an EU-Indonesia free trade agreement to be signed between both markets, she explains.
Sutanto continues: "So there is homework that needs to be done by both the Indonesian government and the US government with regards to the deal. But I think my government has the best interest of our economy and fairly levelling the playing field."
Transparency on import licensing deemed positive outcome from US tariffs She explains Indonesia's fashion, textile and business sectors are keen for more transparency on import licensing as it will help "some of us that plan to import more raw materials to Indonesia".
She describes it as hitting two birds with one stone and believes it will be "positive" for Indonesia's government to be "more progressive" and "accelerate on transparency".
The US government threatened to place a 32% reciprocal tariff on Indonesia earlier this year but this is currently on hold for 90 days. During this period Indonesia's tariff sits at the same 10% rate that Trump has placed on all countries bar China.
When quizzed on the impact of the current 10% tariffs, Sutanto explains US brand and retailers are "quite confused on how to move forward". She's seen some hesitancy to create PO numbers for the future and there are also some issues on pricing as everyone is still in the dark.
Some US brands and retailers ask supply chain to help with 10% tariff burden Some brands have made commitments on future POs as they need to replenish their stocks, but she highlights that "for this period, some brands and retailers have asked the whole supply chain to share the pain of that 10%".
She says some have "asked us to contribute a bit" within the supply chain, which includes the raw materials as well, with the brands and retailers absorbing the rest.
She adds: "We gladly support them within this time period, as we know it's not forever".
She's hopeful that the reciprocal tariffs against Indonesia can be negotiated and everyone can move forward, but she says: "We are still preparing some of the minimum stock that brands need while we wait for the US government to make decisions on the offers that some countries have discussed behind closed doors".
She notes: "That's all that I can say at this moment because it's ongoing and what is discussed now could be different to tomorrow, so it's a very fluid and dynamic situation."
On the whole, Sutanto believes the majority of US brands and retailers are handling the situation well and are focused on how to move forward, but there are some that have decided to source fashion and textiles elsewhere, for example from countries that have free trade agreements with the US.
She asserts that most US brands and retailers are "very happy with the open communication" that has been shown by Indonesia's government and she believes Indonesia will continue to improve its quality, on-time and ethical garment and textile offering for all markets, including the US.
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COMTEX_465348865/2227/2025-05-09T09:45:54
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