Indonesia to import $19 bln worth of US goods to balance trade

Indonesia has become the latest country to agree to increase imports of U.S. goods in an effort to mitigate the impact of tariff policies on its exports.

Coordinating Minister for Economic Affairs Airlangga Hartarto on Friday said Indonesia has proposed increasing its imports from the U.S. by as much as $19 billion, to eliminate its trade surplus with Washington.

Earlier, the Indonesian government announced a plan to import up to $10 billion worth of energy products from the U.S. Indonesia also plans to buy agricultural products including wheat, soybeans and soybean meal and increase purchases of capital goods from the U.S., Airlangga said.

The Southeast Asian country imports both crude oil and natural gas from the U.S. and will need to reduce imports from other suppliers in order to fulfil its commitment to increase purchases from the US.

Indonesia also imported around 300,000 bpd crude oil last year, with Nigeria, Saudi Arabia and Angola as the top suppliers, Kpler data showed. Around 13,000 bpd were imported from the US.

Indonesia imported 217,000 barrels per day of liquefied petroleum gas (LPG) last year, around 124,000 bpd of which came from the U.S.. Around 23,000 bpd were imported from Qatar, while United Arab Emirates and Saudi Arabia each contributed around 20,000 bpd.

To accommodate the increased imports from the U.S., Indonesia plans to reduce its reliance on other suppliers. For instance, the country may decrease LPG imports from Middle Eastern countries like Qatar, the UAE, and Saudi Arabia by 20% to 30%, depending on existing contracts.

This fuel is considered a key factor in Jakarta’s strategy to avert the threat of a 32% tariff on its exports, which has contributed to the country’s trade surplus with the U.S.