Indonesia Responds to US Trade Tariffs with Import Increase Strategy

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• English

Selasa, 8 April 2025 - 16:44 WIB

Jakarta, VIVA – Coordinating Minister for Economic Affairs, Airlangga Hartarto, announced that Indonesia plans to increase its import volume from the United States (US) in an effort to help reduce the US trade deficit with Indonesia.

This move comes in response to the US government's implementation of a 32 percent reciprocal tariff on Indonesian goods.

The initiative aims to reduce the US trade deficit with Indonesia, which currently stands at around US$18 billion.

The minister revealed that this issue was one of the main topics discussed during a coordination meeting involving over 100 business associations, held to address the impact of the new US trade tariffs.

He noted that the sectors most affected by the policy, initiated under former President Donald Trump, include food and ready-made garments—both key export commodities for Indonesia.

“Regarding the tariffs and how we can increase imports, the President has directed us to work on the import-export delta, which could reach US$18 billion,” minister Hartarto said on Monday (Apr 7).

To implement this strategy, Airlangga confirmed that the increase in imports from the US would focus on commodities that Indonesia already imports regularly, such as wheat, cotton, and oil and gas.

Indonesia will also review its top ten import and export commodities, including electronics, wooden furniture, footwear, copper, and gold for exports, and semiconductors for imports.

The minister added that the proposal to increase import volume would be formalized and submitted as part of ongoing negotiations with the US.

Additionally, the government is evaluating other strategies to address the trade deficit, including the implementation of non-tariff measures.

“Some of the measures being considered include a review of our relatively low import tariffs on US products—around 5 percent on average. For commodities like wheat and soybeans, tariffs are already at zero. We're also examining import-related income tax and VAT policies,” he concluded.