Indonesia considers reducing trade tariffs with US

Indonesia is planning to lower trade tariffs with the U.S. as President-elect Donald Trump prepares to implement a universal tariff policy.

Several Indonesian products have long faced import tariffs in the U.S., signalling a challenging trade relationship that could deepen under Trump’s administration.

At the Indonesia Business Competitiveness Outlook 2025 Conference in Jakarta on Monday, the country's Economic Minister Airlangga Hartarto revealed the tariff cut plan as part of broader bilateral cooperation efforts. The proposal aims to mitigate the potential impact of higher US tariffs under Trump’s leadership.

He said that Indonesia is requesting bilateral economic cooperation to reduce tariffs.

Concerns have grown since Trump vowed to impose a 100% tariff on BRICS member nations if they advance plans for a rival currency to the U.S. dollar. Indonesia’s entry into BRICS, less than two weeks before Trump’s inauguration, has amplified worries about the potential impact on Indonesia-U.S. trade relations.

However, Airlangga said U.S. tariffs on Indonesian imports are not new, with disparities in U.S. tariff policies as the U.S. has been imposing tariffs on Indonesian products, including shoes, apparel, and other commodities.

Despite challenges, bilateral trade remains robust, reaching $34.5 billion in 2023, with Indonesia enjoying a $12 billion surplus. From January to October 2024, trade totalled $31.6 billion, maintaining an $11.5 billion surplus for Indonesia.

In his first presidency, Trump ordered a review of Indonesia’s eligibility for the US Generalized System of Preferences (GSP), citing the trade deficit. The GSP, a trade preference program benefiting developing nations, expired in 2020 and awaits congressional renewal.