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Indonesia Imposes Three-year Safeguards Tax On Imported Ceramic Tiles: 23%, 21%, 19%

- Aug 27, 2018 -

On July 16, 2018, the WTO (WTO) Safeguards Commission issued a final notice of safeguards submitted to it by the Indonesian delegation on July 10, 2018. The Indonesian Safeguards Committee finalized the safeguard measures for imported ceramic products (Ceramic Flags and Paving, Hearth or Wall Tiles) and recommended that the Indonesian government levy a three-year safeguards tax on the products involved. The specific measures are as follows: First year: 23%, 21% in the second year and 19% in the third year.

On March 29, 2018, in response to an application submitted by the Indonesian domestic Ceramic Industry Association on March 26, 2018, the Indonesian Safeguards Commission initiated an investigation into the initiation of safeguards for imported tiles. Elisa Sinaga, chairman of the Indonesian Ceramics Industry Association ASAKI, believes that when the real estate market rebounds, its output will exceed 500 million square meters. However, Indonesia was the fifth largest consumer country last year, with consumption reaching 369 million square meters, second only to Vietnam's 412 million square meters.

The Indonesian tax number of the products involved is 6907.21.21, 6907.21.22, 6907.21.23, 6907.21.24, 6907.21.91, 6907.21.92, 6907.21.93, 6907.21.94, 6907.22.11, 6907.22.12, 6907.22.13 6907.22.14, 6907.22.91, 6907.22.92, 6907.22.93, 6907.22.94, 6907.23.11, 6907.23.12, 6907.23.13, 6907.23.14, 6907.23.91, 6907.23.92, 6907.23.93, 6907.23 .94, 6907.30.1, 6907.30.19, 6907.30.91, and 6907.30.99. The investigation period of this case is from 2015 to 2017.

According to the relevant statistics of customs, the ceramic tile products exported to Indonesia in 2017 were US$244 million. Although it was 75.97% lower than 2016, it still ranked fifth in exporting countries, accounting for 5.52% of total exports.

According to relevant data, Indonesia was the fifth largest consumer of ceramic tiles in 2016, with consumption of 369 million square meters, second only to Vietnam's 412 million square meters. Elisa Sinaga, chairman of the Indonesian Ceramics Industry Association ASAKI, believes that local ceramic tile sales remained stable in 2017, but imports are rising. Indonesian tile manufacturers have to compete at the expense of profits due to lower import prices.

Previously, ASAKI of the Indonesian Ceramics Industry Association said that the import tariffs for ceramic products shipped from other ASEAN countries and China to Indonesia will be cancelled in 2018, which means that Indonesian ceramic tile manufacturers will find it increasingly difficult to compete with their ASEAN and Chinese counterparts. With the rising cost of ceramic tile production in Indonesia, imported ceramic tiles are occupying a large market share every year. Local manufacturers are worried about the increasing cost and quality competitiveness of foreign ceramic tiles.

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