How Will the Ongoing US Shutdown Affect Indonesia's Tariff Deals?

October 6, 2025 | 04:42 pm

TEMPO.CO, Jakarta - The Coordinating Ministry for Economic Affairs of Indonesia has expressed hope that the ongoing shutdown of the United States government does not delay ongoing trade negotiations between the two countries.

The US federal government has been partially closed since October 1, 2025, following Congress’s failure to approve the budget for the new fiscal year.

Haryo Limanseto, spokesperson for the Coordinating Ministry, explained that negotiations on reciprocal tariffs are still proceeding.

“Indonesia is currently engaged in a series of virtual intersessional meetings with the US,” he said on Monday, October 6, 2025.

These discussions continue at a technical level involving relevant ministries and agencies, as several points in the agreement remain to be detailed. Haryo emphasized the importance of avoiding delays:

“We hope that the domestic political situation in the US will be resolved soon and does not hinder the negotiation process.”

Why the Shutdown Matters

The partial US government shutdown has entered its fifth day, halting most federal operations and suspending several public services.

According to USA Today, Senate leaders have not yet secured the 60 votes needed to pass the budget bill, prolonging the shutdown. This uncertainty raises concerns about potential layoffs and economic ripple effects.

Deni Friawan, a senior researcher at the Centre for Strategic and International Studies (CSIS), said the shutdown could affect Indonesia in several ways, including export flows to the US, financial market volatility, and ongoing tariff negotiations.

However, the severity of the impact depends on the shutdown’s duration. Short-term closures of two to three weeks may have limited effects, but longer shutdowns — over a month — could significantly disrupt trade relations.

Implications for Indonesia-US Tariff Talks

Indonesia is currently lobbying for tariff exemptions on certain exported goods. The shutdown complicates this process, as the US government cannot process decisions until its operations resume.

“We are waiting for the 19% tariff decision that was previously agreed upon. The exemptions we seek cannot be granted while the shutdown continues,” Deni explained.

In the meantime, Indonesian officials continue to engage with US counterparts virtually, hoping to maintain momentum in the trade discussions despite the political deadlock in Washington.

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