Is Sritex just the start? Indonesia players on edge over further fallout from US tariffs

The collapse of Indonesian textile giant Sritex has put the industry on edge over further fallout from the dumping of Chinese goods brought on by looming American tariffs.

Once Southeast Asia’s largest textile manufacturer, Sritex, or Sri Rejeki Isman, closed its 58-year operation on March 1 after failing to repay debts, affecting more than 10,000 workers. Contributing factors included a surge of cheap, often illegal imports from China and insufficient government support for the labour-intensive sector.

Now, the industry is bracing itself for the effects of US President Donald Trump’s tariffs on Chinese imports, which may drastically cut the volume of Chinese low-cost apparel exports to America. The fear would then be China dumping such goods into developing countries such as Indonesia, experts warned.

On Tuesday, Trump increased the tariff on Chinese products to 20 per cent, and Beijing swiftly retaliated with its own levies of up to 15 per cent on a range of US agricultural exports.

“Of course, we are worried about the US trade war with China. China set up its industry to meet world needs. Their capacity is greater than domestic demand. When this is restricted by import duties by the US, Chinese goods would flood Indonesia,” Redma Gita Wiraswasta, chairman of Indonesian Filament Yarn and Fiber Producers Association, or Apsyfi, told This Week in Asia, adding that the local government was “unresponsive”.

  

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