Jakarta Globe is reporting that the government plans to negotiate with the United States after the announcement of a 32 percent reciprocal tariff on imports from Indonesia, aimed at leveling the playing field, as Jakarta had been imposing 64 percent tariffs on US-made goods.
US President Trump’s team factored in trade barriers, including Indonesia’s policy that requires American manufacturers to source parts of its goods domestically. Trump even said that the US was trying to be nice by only charging half of the rates that Indonesia, and other countries had been slapping on American imports for many years.
Indonesian ministries finally issued the much-awaited joint press statement on Thursday evening (3/4/25,) following internal discussions within the government. Indonesia revealed that the country was aware that it would be a target of Trump’s tariffs sooner or later, saying that talks had already been long underway with the White House in hopes the latter would reconsider the policy, according to Jakarta Globe.
“Since the beginning of the year, the Indonesian government has prepared various strategies and steps in response to the US’ reciprocal tariffs. We have been negotiating with the US government,” a statement published on the Foreign Affairs Ministry’s website reads.
The government has also “intensively coordinated” with Indonesian businesspeople to brace for the impact. A baseline 10 percent tariff will come into effect on April 5 before the reciprocal rates enter into force four days later. This should give more time for Indonesia to make a pitch for some revisions. According to the statement, Indonesia intends to continue talking with the US government “across various levels”.
“We will send a high-level delegation to Washington DC to directly negotiate with the US government,” the statement reads.
Jakarta Globe reports that the government did not say who would be among the high-level representatives. As part of the negotiations, Indonesia said it had prepared some undisclosed steps to respond to the trade issues raised by the US. A report published by the US Trade Representative a few days before Trump’s freshly signed executive order highlighted American businesses’ concerns over Indonesia’s import licensing system and halal or Islamic law-compliant import requirements, among others.
President Prabowo Subianto has instructed his cabinet to simplify or get rid of regulations that could become non-tariff barriers, according to the press release. Indonesia also promised that it would “improve the investment climate”. Jakarta has also reached out to fellow ASEAN nation Malaysia to prepare for some “joint steps” as all ten of the bloc’s members would be subject to Trump’s tariffs. Charts published by the Trump administration revealed that tariffs within ASEAN range from 10 percent to 49 percent with Cambodia facing the highest rates, says Jakarta Globe.
Experts have urged Indonesia to have last-minute negotiations with the US following Trump’s latest trade move. Analyst Bhima Yudhistira called for such talks, although he admitted that the likelihood of Trump having a change of heart was “slim”. Senior economist Eisha Maghfiruha Rachbini said the government needed to immediately negotiate with the US to minimize the tariff’s impact.
“[Indonesia’s] diplomatic negotiating power would be very crucial in mitigating the effect of the trade war with the US,” Eisha said.
Source: Jakarta Globe
Stock photo by Markus Winkler on Unsplash
