Indonesia seeks to import more US goods, avoid retaliation on tariffs

April 08, 2025 - 08:25
President Prabowo Subianto gave instructions to narrow Indonesia’s US$18 trillion surplus in trade with the US by importing more American products.
Coordinating Economic Minister Airlangga Hartarto speaks at a press conference on March 24 following a meeting on the Just Energy Transition Partnership involving ambassadors from nine countries in the International Partners Group. — The Jakarta Post/ANN Photo

JAKARTA — The government has vowed to import more goods from the United States to gain leverage in bilateral negotiations and ease tariffs introduced by US President Donald Trump as Jakarta seeks to avoid retaliatory measures.

Following a multi-stakeholder meeting on Monday, Coordinating Economic Minister Airlangga Hartarto said in a press conference that President Prabowo Subianto had instructed him to narrow Indonesia’s US$18 trillion surplus in trade with the US by importing more American products.

“[The] President has given the instruction to [narrow the trade surplus by importing] more [US] products that we need, including wheat, cotton or even oil and gas products,” said Airlangga.

He added that the government would probably push for importing more US goods in procurement for national strategic projects, including for refineries.

The senior minister said Jakarta would “take the negotiation path” and will not resort to imposing retaliatory measures, much like “most ASEAN member states”. He said government officials of ASEAN countries would meet on April 10 “to calibrate their stance”.

He went on to say that the US Trade Representative (USTR) “is awaiting a concrete proposal from Indonesia”.

Deputy Industry Minister Faisol Riza told reporters after the meeting that a high-ranking delegation from Jakarta would commence negotiations with White House officials “by April 17 at the latest”.

The head of the Finance Ministry’s Fiscal Policy Agency, Febrio Nathan Kacaribu, revealed that Airlangga was leading the main negotiation team, which would also include Finance Minister Sri Mulyani Indrawati and Foreign Minister Sugiono.

Febrio, who attended Monday’s meeting, told reporters that Airlangga and Sugiono would fly to the US “next week”.

Airlangga’s office previously made it clear that Jakarta was seeking to “prepare steps to respond to” issues raised by the White House, particularly those addressed in the 2025 National Trade Estimate Report on Foreign Trade Barriers released by the USTR last week.

Read also: Indonesia prepares to respond to US tariffs

The report assesses Jakarta’s trade policy and lists a wide range of gripes in areas ranging from tariffs and taxes to nontariff barriers, including licensing requirements, market access restrictions and state trading.

“Over the last decade, Indonesia has progressively increased its applied tariff rates on a variety of goods, particularly those competing with locally manufactured products,” the report finds, before proceeding to detail issues such as “complex and burdensome licensing regimes for the importation of horticultural products, animals and animal products”.

Washington contends that Indonesia’s measures amount to the equivalent of a 64 percent tariff rate against US products when “currency manipulation and trade barriers” are accounted for.

Read also: Indonesian business groups urge talks with US on tariffs

In response, the US government imposed a tariff of 32 per cent against Indonesia in a second round of so-called “reciprocal tariffs” to become effective on April 9, going beyond the 10 percent baseline tariff Washington slapped on imports from all countries starting on April 5.

Apart from increasing imports from the US, the Industry Ministry’s Faisol said reducing the minimum local content requirements (TKDN) exclusively for US products would be brought to the negotiation table, but he refused to specify the extent.

Moreover, the government is also offering administrative leniency in taxation, customs and excise, which would apply universally, not only for the US.

Deputy Finance Minister Anggito Abimanyu told reporters after the meeting that tariff cuts were “on the menu” too. — The Jakarta Post/ANN

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