The reciprocal tariff policy imposed by the United States poses a real risk to employment in Indonesia, especially in export-oriented labor-intensive sectors such as textiles and footwear. These two sectors not only contribute a significant portion of manufactured exports, but also absorb a large number of workers, especially young, low-educated, and casual workers, who are structurally vulnerable. The pressure from additional tariffs has the potential to worsen the wave of layoffs that have occurred since the pandemic, exacerbated by intense global competition and high dependence on export markets. The differences in characteristics between micro, small and medium-sized industries (MSMEs) and large industries further emphasize the inequality of risk and social protection, where MSMEs tend to be more informal and less protected, while the large industrial sector also remains weak through the use of vulnerable contract workers. This condition requires a more strategic differentiation of employment policies that are responsive to risk segmentation in the field.
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