Jakarta, CNBC Indonesia - President Donald Trump's decision to impose an additional 32% tariff on imports of all goods from Indonesia to the United States (US) threatens the sustainability of businesses in the country, including the fate of domestic fishermen and shrimp farmers.

As is known, Trump announced an additional 32% tariff on all Indonesian products, in addition to existing sectoral tariffs. This additional tariff will take effect on August 1, 2025.

In fact, the US remains the primary destination for Indonesian fishery exports. However, Indonesia is only the fifth largest fishery supplier to the US, behind Canada, Chile, India, and China.

Two groups of Indonesian fishery commodities exported to the US are processed crustaceans and mollusks, as well as frozen crustaceans. These two commodities contributed US$1.43 billion to the total value of Indonesian fishery exports to the US in 2024, which reached US$41.92 billion.

Therefore, said the Head of the Fisheries and Livestock Division of the Indonesian Employers Association (Apindo) Hendra Sugandhi, adaptive resilience is needed by all stakeholders in the fisheries sector to strengthen the competitiveness of fishery product exports.

"We cannot avoid Trump 2.0 tariffs and other international disruptions (including war between countries). Other external shocks may follow (uncontrollable)," he told CNBC Indonesia, quoted Thursday (July 10, 2025).

Hendra said that Indonesia can take strategic steps from the internal side.

"From an internal perspective, we can quickly optimize the deregulation of licensing facilities, which is a factor that can be addressed directly (controllable), and is not dependent on the outside world. Internal improvements can be carried out much more quickly by ourselves," he said.

"In addition, we must strengthen our market diversification strategy outside the US by strengthening trade cooperation (free trade agreements/FTAs) and minimizing tariff and non-tariff barriers," Hendra said.

He emphasized that the fisheries industry, including shrimp, in Indonesia cannot be compared to other industries. Therefore, he added, product diversification through downstream processing cannot be considered the sole solution. It is not a strategic solution for the Indonesian fisheries and shrimp sector.

"Live fish or fresh shrimp are the most expensive. Second is sashimi, third is fresh, and fourth is frozen. So don't assume that downstreaming is the only key. Because the best quality shrimp are those with their heads on, which are the most expensive. The indicator is in the head," he explained.

"This fisheries industry is unique. It's the opposite of other industries. The longer it's processed, the lower its value. You can check the price of head-on shrimp and headless shrimp. So, if you say strengthening downstream processing isn't the solution, in my opinion. Perhaps my thinking is at odds with the majority," Hendra added.

However, he emphasized, this doesn't mean developing downstream fisheries, including shrimp, isn't important. For example, downstream shrimp processing, which has now expanded to include the processing of shrimp shells into flour, should not be limited to downstream processing alone.

"Let's look at Ecuador, for example. Why did their exports to the US soar so rapidly? Let's just follow their success story," Hendra said.

Hendra said Trump's policy of increasing tariffs on Indonesian products by 32% would put pressure on Indonesian fisheries exports to the US. Furthermore, Indonesia currently cannot take advantage of broader market access to the European Union (EU) because the comprehensive economic cooperation plan with the region (Indonesia-EU CEPA) has not yet been finalized.

Moreover, the results of the 2017 EU DG Sante audit assessed that Indonesia's fishery food safety monitoring system was inadequate, resulting in a moratorium on approvals (no new permits) as long as the corrective action requested by DG Sante could not be fulfilled.

"Around 64% of our market, especially shrimp, depends on the US market. So, if this 32% rate is still applied in August, for example, it will be a burden. Importers will definitely burden us by lowering prices here. So, the farmers will automatically be the ones affected. Ultimately, it's the farmers," said Hendra.

As a result, he continued, fish farmers and fishermen will experience a decline in income, which will ultimately erode their purchasing power domestically.

"It will automatically impact investment interest. Investment from fish farmers will also decline. (Are fish farmers'/fishermen's funds dwindling, so they can hold off on plans to improve maintenance and meet international standards?) Yes. So the impact is indeed quite severe," Hendra concluded.

"The number of fish farmers and fishermen will definitely decrease. Our fisheries production will also be threatened. Yes (it's not impossible that it will decrease even further)," he said.

Therefore, he said, in addition to ongoing negotiation efforts, as well as market diversification and product downstreaming plans, another strategic step that needs to be taken internally is to reduce cost burdens that are a high economic cost for fish farmers/fishermen.

"The bottom line is that all high costs must be eliminated to strengthen our competitiveness. Essentially, if fish farmers and fishermen are strong and their businesses grow, the downstream sector will certainly thrive. That's why we need to look at and compare the keys to Ecuador's success," Hendra emphasized.