Women shop for clothing as they prepare for the celebration of the Eid al-Fitr holiday at a market in Jakarta, Indonesia, Monday, March 24, 2025. Indonesia's key export goods for the US include electric appliances, clothing and footwear. - AP
JAKARTA: Indonesian Chamber of Commerce and Industry (Kadin) chairman Anindya Bakrie plans to hold talks with the United States Chamber of Commerce in May over the US administration’s move to impose a 32 per cent tariff on goods imported from Indonesia.
In a statement released on Thursday (April 3), the day after US President Donald Trump announced broad tariffs on other countries, Anindya conveyed Kadin's plan to visit the US in May to continue partnership talks with its US counterpart as well as to attend business conferences.
“I perceive President Trump’s remark as an opening statement, meaning that the door for negotiation remains open,” he stated, suggesting that Indonesia’s strategic location in the Pacific area and the country’s vital role in Asean in the Asia-Pacific Economic Cooperation forum gave it sway in global economic affairs.
Anindya also noted Indonesia’s significance as the country with the largest Muslim population and a leader among non-bloc nations, which he added was “no doubt a consideration for Trump”.
The so-called reciprocal import tariff the US imposed on Indonesia is projected to significantly impact the trade balance and investment flows. The US is the largest contributor to the country’s foreign exchange, with Indonesia enjoying a surplus of US$16.8 billion in bilateral trade last year.
The new US policy is expected to affect the flow of foreign direct investment and portfolio investments. Efforts to address the impact should focus on attracting more investment in special economic zones from the US and its allies, while also aiming to attract industry relocations from China, Anindya said.
He also anticipated an impact on workers with potential layoffs in the manufacturing industry, since the country’s key export goods for the US included electric appliances, clothing and footwear. Anindya suggested diversifying trade relations to reduce reliance on the US, noting that Indonesia should reach new markets other than in the Asia Pacific region and Asean, namely Central Asia, Turkey, Europe, Africa and Latin America, in addition to focusing on improving labour-intensive industries that were affected across the entire supply chain.
He further highlighted the country’s opportunity to maintain its trade partnership with the US by leveraging Indonesia’s role as a key export market for the US in sectors such as defence equipment, aerospace and liquified natural gas.
Anindya explained that Indonesia could also benefit from the US’ Inflation Reduction Act (IRA), which encourages clean energy investment, to export processed nickel and other mineral products that meet environmental and labour standards.
The lobby group chairman called on the government to prepare comprehensive economic policies in response to the US measures, including simplifying and revoking regulations, particularly on non-tariff barriers, increasing competitiveness, maintaining market confidence and attracting investment.
He said he looked at the Trump administration’s decision as a moment for government institutions, Bank Indonesia, the Financial Services Authority and business players to work together in ensuring market confidence and rupiah stability and tackling the high cost of the local economy reflected in Indonesia’s incremental capital output ratio above six per cent.
The US set a ten per cent baseline tariff on imports from all countries starting on April 5. On Wednesday, it announced a second round of individual “reciprocal” tariffs, targeting nations the US has large trade deficits with, including Indonesia.
The tariffs apply to all goods except for a few strategic exemptions, including semiconductors, pharmaceuticals, copper and critical minerals, like nickel. A White House statement points to local content requirements, complex import licensing and a rule mandating natural resource firms to onshore export revenues above US$250,000 as "unfair" trade practices that prompted the 32 per cent tariff. - The Jakarta Post/ANN
Save 30% for ads-free and full access now!
