Indonesia's Airlangga: Tariff Talks to Resume Only After US Political Crisis Ends

1 week ago 9

October 7, 2025 | 02:28 pm

TEMPO.CO, Jakarta - Indonesia's Coordinating Minister for Economic Affairs Airlangga Hartarto said the ongoing United States (US) government shutdown has disrupted Indonesia-US trade negotiations. The discussions, he noted, will resume only after the political impasse in Washington is resolved.

The US government has been partially shut down since October 1, 2025, after Congress failed to approve the federal budget for the new fiscal year.

Airlangga said Indonesia is still in the process of negotiating a draft trade agreement with the US, but progress has stalled amid the shutdown.

“We are waiting to see how long the US shutdown will last. Once it ends, we can restart the legal drafting process,” Airlangga said during the Wealth Wisdom 2025 event hosted by Permata Bank in Jakarta on Tuesday, October 7.

Previously, the US government imposed a reciprocal tariff rate of 19 percent on Indonesian goods. Jakarta has been lobbying Washington for exemptions on several export commodities, including cocoa, coffee, and palm oil.

Airlangga said the reduction of the reciprocal tariff from 32 percent to 19 percent would benefit around five million workers in Indonesia’s textile, furniture, and footwear industries.

Meanwhile, Coordinating Ministry for Economic Affairs spokesperson Haryo Limanseto confirmed that talks on the tariff issue remain ongoing at the technical level, involving multiple ministries and related institutions. He expressed hope that the shutdown would not delay the process further.

“We hope the domestic political situation in the US will be resolved soon and not hinder the negotiation process,” Haryo told Tempo on Monday, October 6.

The shutdown has led to the suspension of many US government operations and public services, now entering its fifth day as of Sunday, October 5, local time.

Deni Friawan, a senior researcher at the Centre for Strategic and International Studies (CSIS), said the shutdown could affect Indonesia’s exports to the US, heighten financial market uncertainty, and slow progress on the tariff talks.

“If the shutdown lasts less than two or three weeks, the impact will likely be minimal. But if it extends beyond a month, as seen in past cases, the consequences could be much more significant,” Deni said.

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Ilona Estherina contributed to the writing of this article.

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