July 18, 2025

 

Indonesia's US$1.9 billion seafood exports face pressure from new US tariffs 

 

 

Indonesian seafood exporters are preparing for slimmer profit margins as the US plans to raise tariffs on Indonesian seafood to 19% starting August 1, nearly doubling the current 10% rate and ending years of duty-free access.

 

While the final 19 % rate is lower than the threatened 32 % previously floated by the US, Indonesian businesses say the increase from zero to 19 % remains a heavy blow.

 

"For us, it's not about the drop from 32 % to 19 %, but the jump from zero to 19 %. Even with 10 %, we've already struggled," said Budhi Wibowo, chairman of the Indonesian Fisheries Processing and Marketing Entrepreneurs Association (AP5I), in an online briefing with B Universe on Wednesday (July 16).

 

Indonesia's seafood exports are valued at US$6 billion annually, with US$1.9 billion heading to the US market, of which shrimp alone contributes around US$1.1 billion. The new tariffs could erode Indonesia's competitiveness against other exporters in the US market, Budhi warned.

 

Amid the looming tariff increase, Budhi urged the Indonesian government to simplify licensing procedures and lower non-tax state revenue (PNBP) fees on fisheries, which he said drive up production costs and hurt the industry's competitiveness.

 

"The more permits we need, the higher the costs. We're asking the government not to raise PNBP in upstream fisheries. If fees remain high, we can't compete or enter new markets," Budhi said, adding that higher upstream charges could be counterproductive by shrinking business activity and reducing the government's potential tax and market expansion revenue.

 

Budhi also called on the banking sector to increase credit ceilings for fisheries businesses to cover higher working capital needs under the new tariff regime.

 

"With the 19 % tariff, our working capital needs will rise by 19 % since we have to pay the tariff as soon as containers arrive at US ports," he explained. "We hope banks will increase our credit ceilings and, if possible, lower interest rates during this challenging time."

 

-      Jakarta Globe