TEMPO.CO, Jakarta - Imports of U.S. products to Indonesia are expected to surge following the zero percent export facility granted by the U.S. to Indonesia. In contrast, Indonesia's import tariff to the U.S. reaches 19 percent.
Bhima Yudhistira, Executive Director of the Center of Economic and Law Studies (Celios), stated that the oil and gas sector is among the most affected, alongside electronic products, aircraft spare parts, cereals, and pharmaceuticals.
"A 19 percent tariff for Indonesian exports to the U.S., while the U.S. receives a 0 percent facility, actually poses a high risk for Indonesia's trade balance," he said in a written statement to Tempo on Wednesday, July 16, 2025.
Bhima mentioned that throughout 2024, total imports of these five main product types reached US$5.37 billion, or approximately Rp87.3 trillion. The widening deficit in oil and gas is expected to further pressure the rupiah's exchange rate and compel the government to allocate larger energy subsidies than initially planned.
According to Bhima, the government's proposed energy subsidy allocation of Rp203.4 trillion for 2026 will not cover the projected need for oil and gas imports. He estimated that at least Rp300-320 trillion will be required, given Indonesia's increasing reliance on fuel oil and LPG imports.
He added that the longstanding dependence on oil and gas imports has become a significant burden for the State Budget.
"There is concern that Indonesia will have to buy oil from the U.S. at a higher price than the market due to trade negotiation agreements. If Indonesia is asked to buy oil and LPG products at prices higher than those normally purchased by Pertamina, it will be troublesome," he explained.
Therefore, Bhima believed this moment should be seized to accelerate the energy transition, reducing reliance on fossil fuels. "All energy transition programs must be implemented immediately so that the oil and gas deficit can be alleviated," Bhima urged.
Details of the Trump-Prabowo Trade Agreement
Earlier this morning, U.S. President Donald Trump announced a reduction in import tariffs for products from Indonesia to 19 percent. This figure is notably lower than the previously announced tariff of 32 percent on Monday, July 7, 2025.
Trump stated that the tariff reduction was decided after reaching a trade agreement with President Prabowo. He revealed that the Indonesian Government made several offers, including a commitment to purchase 50 Boeing aircraft, primarily from the 777 series.
Furthermore, Trump mentioned that Indonesia also plans to import energy commodities from the U.S. worth US$15 billion, or approximately Rp240 trillion (assuming an exchange rate of Rp16,000 per US dollar). In return for the tariff reduction, Indonesia also agreed to purchase U.S. agricultural products worth US$4.5 billion, or around Rp72 trillion.
Trump added that Prabowo's administration will also open the market as wide as possible for products from the U.S.
On Wednesday morning, Prabowo posted a photo of himself speaking on the phone with Trump as the U.S. reduced import tariffs on Indonesia from 32 percent to 19 percent.
"I had a very good call with President Donald Trump. Together, we agreed and concluded to take trade relations between Indonesia and the United States into a new era of mutual benefit between our two great nations," Prabowo wrote on Instagram.
Earlier, Minister of Energy and Mineral Resources (ESDM) Bahlil Lahadalia had stated the government's readiness to import oil and gas from the U.S. if reciprocal tariffs for Indonesia were reduced.
"From the ESDM, we have allocated around US$10 to US$15 billion for spending in America, if the tariffs are also lowered. But if not, then there won't be a deal, right?" Bahlil said at the Parliament Complex, Senayan, Jakarta, on Monday, July 14, 2025.
Annisa Febiola and Eka Yudha Saputra contributed to this report.
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