5 Major Deals in Indonesia-US Negotiations Over Trump Tariffs

April 28, 2025 | 11:45 am

TEMPO.CO, Jakarta - The Indonesian government and the United States are formulating five main agreements in response to President Donald Trump's reciprocal tariff policy, potentially putting pressure on national exports. This step is taken to dampen the impact of high import duties set by the U.S., reaching 32 percent, on several Indonesian products.

In a virtual press conference of the Financial System Stability Committee (KSSK) on Thursday, April 24, 2025, Finance Minister Sri Mulyani Indrawati revealed that both countries are actively communicating and negotiating to reach a mutually beneficial point.

"The government has explored the process and engaged in communication with the U.S. to respond to reciprocal tariff policies," said Sri Mulyani.

Here are the five agreement points currently being explored by both countries:

1. Import Duty Adjustment: Indonesia will adjust import duties on several U.S. products selectively, as a retaliatory measure.

2. Strategic Import Increase: The government agreed to increase imports from the U.S., especially for commodities not produced domestically, such as oil and gas, high-tech machinery, and agricultural products.

3. Fiscal and Customs Reform: Indonesia to implement tax reforms and customs to create a more conducive and transparent trading climate.

4. Non-Tariff Measures Adjustment: Non-tariff policies such as Domestic Component Level (TKDN), import quotas, deregulation, and cross-ministerial technical considerations will be adjusted.

5. Protection from Import Floods: The government will activate trade remedies instruments quickly and responsively to counter the potential flood of imported goods.

Quoted from Antara, Friday, April 25, 2025, Sri Mulyani reiterated that these five policy measures are not only in response to external pressures, but also to maintain macroeconomic stability and the sustainability of the State Budget (APBN).

In further diplomatic efforts, Sri Mulyani also outlined the results of her meeting with U.S. Treasury Secretary Scott Bessent while attending the G20 Forum and 2025 IMF Spring Meeting in Washington, DC. In the meeting, the U.S. reaffirmed its commitment to lead global financial institutions such as the IMF and the World Bank, which also serve as channels of influence for U.S. national policies.

The Finance Minister emphasized the importance of understanding the direction of U.S. trade policies, which currently prioritize reciprocal principles. According to her, Indonesia is strengthening economic diplomacy through various channels, including the Office of the U.S. Trade Representative (USTR), the U.S. Department of Commerce, and the U.S. Department of the Treasury.

These tariff negotiations also occur amid the dynamics of U.S.-China trade relations, which, according to the Finance Minister, have a broad influence on the global economic landscape, including Indonesia's.

Interestingly, Indonesia's initial proposal received a positive response from the U.S. Sri Mulyani referred to Indonesia as a "first mover" in tariff negotiations, giving it a strategic bargaining position in the next process.

"Our proposal is recognized as one of the most comprehensive and visionary. This becomes an important asset for further technical discussions," she said.

As part of the negotiation commitment, Indonesia signed a non-disclosure agreement with the USTR on April 23, 2025. This makes Indonesia one of the first 20 countries to enter the initial stage of tariff negotiations.

Coordinating Minister for the Economy Airlangga Hartarto added that the government targets the technical negotiation stage to be complete within 60 days.

"We hope that the details of the discussions and technical negotiations can be completed within 60 days," said Airlangga.

Meanwhile, Indonesia is also expanding its export strategy to the ASEAN Plus Three region (China, Japan, South Korea), BRICS countries, and the European market, as part of market diversification amidst global trade uncertainties.

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