"CSIS: US Zero-Percent Textile Tariff Carries Structural Risks", 27 February 2026

A researcher from the Department of Economics at the Centre for Strategic and International Studies (CSIS), Riandy Laksono, has highlighted potential risks behind the implementation of a zero-percent tariff for textile products under the Indonesia-US trade agreement.

Under the Agreement on Reciprocal Trade (ART), the size of the duty-free quota for textile exports is tied to the volume of raw materials sourced from the United States. Riandy cautioned that this requirement could create structural challenges for Indonesia’s textile industry...

Imported cotton from the US accounts for only about 8.6 percent of Indonesia’s total cotton imports, compared to 29.4 percent from China.

The disparity is even more pronounced in man-made fibers...

“If the business sector is forced or even strongly encouraged to switch to raw materials from the US, there will be significant disruption in the supply chain,” Riandy said...

Beyond supply structure, Riandy also emphasized price competitiveness as a major concern. According to him, raw materials sourced from the US are substantially more expensive than those from other suppliers...

He argued that these higher input costs could erode, or even eliminate, the economic benefits gained from the zero-percent tariff facility for Indonesian textile exports...