No Deal Yet: Takeaways from Indonesia-US Tariff Talks

Heru Andriyanto
April 19, 2025 | 10:36 pm
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Foreign Affairs Minister Sugiono meets US Secretary of State Marco Rubio in Washington DC on April 16, 2025 local time. (Photo Courtesy of Foreign Affairs Ministry)
Foreign Affairs Minister Sugiono meets US Secretary of State Marco Rubio in Washington DC on April 16, 2025 local time. (Photo Courtesy of Foreign Affairs Ministry)

Jakarta. An Indonesian delegation has held a series of high-level meetings with US trade officials this week in Washington to seek relief from the steep tariff hikes imposed by President Donald Trump’s administration. While both sides acknowledged the challenges posed by the trade measures, the talks concluded without a formal agreement.

Coordinating Minister for Economic Affairs Airlangga Hartarto, who led the delegation, said further rounds of negotiations are expected over the next two months.

“Indonesia is among the first few countries to be received by the Trump administration for bilateral talks on tariffs, along with Italy, Japan, and Vietnam,” Airlangga said during a video conference with Indonesian journalists on Friday.

The Indonesian officials met with US Secretary of Trade Howard Lutnick and Trade Representative Jamieson Greer on Thursday, a day after Foreign Minister Sugiono met with Secretary of State Marco Rubio.

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Tariffs Could Reach 37 Percent
Although the US administration initially announced a 32 percent tariff on Indonesian exports, excluding the baseline tariff of 10 percent, Airlangga said the actual ceiling could be higher.

“The range is between 10 and 37 percent, so the maximum tariffs facing Indonesia can be 10+10 or 10+37,” he said. “These tariffs will certainly increase the costs of our exports to the US.”

Labor-Intensive Sectors Hit Hardest
Indonesia is seeking fairer treatment for several key export categories, particularly labor-intensive goods such as footwear, textiles, furniture, and shrimp. These products are subject to the higher end of the tariff bracket and could lose competitiveness in the US market.

“We want a level playing field. Tariffs on Indonesian products are still higher compared to those imposed on similar goods from other ASEAN countries,” Airlangga said.

Electronics and Minerals May See Exemptions
Certain electronics -- including mobile phones and semiconductors -- have already been exempted from the new tariffs, according to Airlangga. Indonesia has requested that similar treatment be extended to other electronic goods, such as home appliances.

Presidential economic advisor Mari Elka Pangestu added that exports of critical minerals from Indonesia may also be exempt from the US tariff regime.

Trade Concessions Offered
Indonesia has proposed a number of trade concessions in exchange for tariff relief. These include increasing imports of liquefied petroleum gas, gasoline, soybeans, soybean meal, and capital goods from the US.

The government is also preparing regulatory adjustments to streamline business licensing and import procedures for US companies. Washington, meanwhile, has called on Indonesia to ease local content requirements, particularly for American technology investments. Airlangga cited data center construction as one of the areas under discussion.

Expanding Trade Beyond the US
While the latest discussions signal an open channel for continued dialogue between Jakarta and Washington, the absence of a concrete agreement underscores the uncertainty facing Indonesia’s export sectors.

As part of broader mitigation efforts, Indonesia is accelerating trade negotiations with other partners. The government is seeking to finalize the long-delayed Indonesia-EU Comprehensive Economic Partnership Agreement (CEPA), which has been under negotiation since 2016.

Airlangga also reported progress in talks with Australia, which has agreed to increase imports of Indonesian goods. Additionally, Indonesia has asked for Australia’s support in securing broader access to the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP), which includes Mexico and several South American nations.

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