1 week ago
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TEMPO.CO, Jakarta - Coordinating Minister for Economic Affairs Airlangga Hartarto revealed that the government is currently preparing a policy package to present to U.S. President Donald Trump. He stated that President Prabowo Subianto prefers negotiation over retaliation in dealing with Trump’s protectionist import tariffs.
“Following the President’s direction—conveyed both in discussions and during cabinet meetings—Indonesia has opted for negotiation, as the United States remains a strategic partner,” Airlangga said at an economic forum in Jakarta on Tuesday, April 8, as seen on the official YouTube channel of the Presidential Secretariat.
The following is what are included in the government’s negotiation strategy.
Boosting Imports from the U.S.
Airlangga explained that Indonesia is prepared to increase imports of certain American commodities in an effort to balance the trade deficit. In line with Prabowo’s directive, Indonesia would focus primarily on boosting agricultural imports.
“We are talking about agricultural products we don’t produce ourselves, such as soybeans and wheat, which are commodities from agricultural states that happen to be Republican strongholds,” he said. “We are also looking into purchasing more engineering products.”
He added that discussions have already taken place with Minister of Energy and Mineral Resources Bahlil Lahadalia regarding the potential purchase of liquefied petroleum gas (LPG) and liquefied natural gas (LNG) from the U.S. Airlangga assured that this would not place any additional burden on the state budget.
“This is not about spending more, but rather reallocating current purchases—a switch. So, it won’t disrupt the national budget,” he stated.
Fiscal and Non-Fiscal Incentives
Airlangga added that the government also wants to offer both fiscal and non-fiscal incentives to the U.S., including tariff reductions and other tax-related relief measures. According to him, the Indonesian Embassy has already engaged with the Office of the United States Trade Representative (USTR).
“The aim is to ease the entry of American goods into Indonesia, while also boosting the competitiveness of our own exports. For the record, Indonesia has sent an official letter, which has been received by the U.S. through our Ambassador,” he said.
Easing TKDN Requirements
The government is also considering easing Non-Tariff Measures (NTMs), particularly by relaxing local content requirements for the information and communications technology (ICT) sector. Airlangga added that the scope of negotiations also includes speeding up halal certification processes and evaluating existing import restrictions (lartas).
“The U.S. has also shown openness when it comes to free trade zones. This could work in our favor during negotiations, especially with planned investments from data center providers like Oracle and Microsoft,” Airlangga explained.
To move these talks forward, Indonesia will dispatch three ministers from President Prabowo’s cabinet to negotiate directly with U.S. authorities: Coordinating Minister for Economic Affairs Airlangga Hartarto, Finance Minister Sri Mulyani Indrawati, and Foreign Affairs Minister Sugiono.
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