Enviro News Asia, Jakarta — The United States government recently announced a reciprocal tariff policy targeting several of its trading partners, including Indonesia. This policy has triggered new dynamics in international trade relations and raised concerns about the stability of Indonesia’s exports.
In a press release, the Coordinating Ministry for Economic Affairs stated that in response to this development, the Indonesian government acted swiftly and in a coordinated manner. Indonesia not only expressed its stance but also submitted a concrete proposal to the U.S. government, embracing the spirit of fair and mutually beneficial bilateral cooperation.
“We sent letters to the U.S. government, including the USTR, the U.S. Department of Commerce, and most recently, the U.S. Treasury. And Indonesia’s outreach was positively received by the United States. As a result, Indonesia became one of the first countries to be invited for scheduled talks with the U.S.,” said Coordinating Minister for Economic Affairs Airlangga Hartarto during the “Investor Daily Roundtable: Trump’s Trade Trap?” hosted by B Universe at The Westin Jakarta on Wednesday (April 30).
Minister Airlangga revealed that since the policy was first announced, the government has engaged in cross-country communication and reinforced ASEAN’s collective position on the matter. Indonesia has actively maintained communication with various strategic partners, including Malaysia, Singapore, the European Union, the United Kingdom, and China, while conducting intensive diplomacy with the United States.
On that occasion, Minister Airlangga also mentioned that Indonesia had taken several anticipatory measures, including drafting a policy package and forming a special task force. This prompt response from Indonesia was appreciated by the U.S., giving the country a strategic advantage as an early mover.
“They referred to us as an early mover. So, Indonesia, as an early mover offering a relatively comprehensive proposal, was appreciated. Indonesia anticipates that 72 countries will enter negotiations, all to be resolved within 90 days. To compete with these countries, we need a specialty—something that appeals to the U.S.,” said Minister Airlangga.
Indonesia offered a holistic and balanced solution known as a “comprehensive and fair proposal.” This offer includes revitalizing previous bilateral trade agreements, such as the Indonesia-U.S. and ASEAN-U.S. Trade and Investment Framework Agreements (TIFA).
“We are not only responding to the U.S., but we also have requests for them. So, it’s not one-way but two-way communication, aimed at improving bilateral economic relations. Indonesia directly proposed a format for the agreement,” added Minister Airlangga.
Indonesia also emphasized the importance of diversifying its export markets. While the U.S. is Indonesia’s second-largest export destination, Minister Airlangga stated that Europe is the next strategic target. The negotiation of the Indonesia–European Union Comprehensive Economic Partnership Agreement (IEU-CEPA) is said to be nearing completion and could create significant opportunities for Indonesian export products, especially textiles, footwear, and food.
This initiative serves as a momentum for Indonesia to accelerate domestic reforms, particularly in preparation for accession to the OECD and CPTPP. In line with this, the government has formed two special task forces: the Negotiation Task Force, chaired by Minister Airlangga and involving all relevant ministries/agencies, and the Deregulation Task Force, which will follow up on regulatory simplification across various sectors.
“This is the President’s directive—it is our collective effort, Indonesia Incorporated. Through this concept, we hope to push forward the economy. Even though all countries are affected by this tariff wave, we hope ASEAN will have an antidote, much like the vaccine during the Covid-19 pandemic. Hopefully, with this antidote, each country can build resilience against global uncertainty,” concluded Minister Airlangga.
