Indonesian officials said on Monday they will begin easing import restrictions and licensing requirements ahead of the July 9 deadline for U.S. tariff negotiations.
Members of President Prabowo Subianto’s government promised to deregulate, streamline the bureaucracy, and reduce non-tariff import barriers as part of trade negotiations with the United States.
At a press conference on Monday, Coordinating Minister for Economic Affairs Airlangga Hartarto said restrictions would be eased on ten groups of commodities over the next two months.
“There are measures we’ve already implemented, and others will depend on the outcome of the tariff negotiations,” he said.
Airlangga also said Subianto’s government has extended an offer to the U.S. for joint investment in a critical minerals project, which would provide nickel, copper, and minerals useful to the “electric vehicle ecosystem.”
“For America, what Indonesia offers is quite interesting,” he said.
Airlangga said he has been speaking directly with U.S. Treasury Secretary Scott Bessent, who has agreed to several of Indonesia’s offers in principle. At the press conference, Indonesia’s ministers highlighted plastic and chemical products, fertilizer, and forestry items as examples of products that would become easier to import.
Indonesia is the largest economy in Southeast Asia, and the United States is one of the top three customers for Indonesian goods, importing about $26.3 billion last year. U.S. exports to Indonesia are relatively modest, leading to a $16.8 billion trade surplus for Indonesia.
Indonesia’s trade policy has been nakedly protectionist, with high tariffs, heavy import restrictions, and notoriously poor logistics hindering imports.
“Over the last decade, Indonesia has increased its applied tariff rates for a range of goods that compete with locally manufactured products, including electronic products, milling machines, chemicals, cosmetics, medicines, wine and spirits, iron wire and wire nails, and a range of agricultural products,” the U.S. Trade Representative (USTR) found in a 2024 report on India’s trade barriers.
USTR also cited complaints from American exporters about Indonesia’s “non-transparent and cumbersome auditing process, heavy fines for administrative mistakes,” and “lengthy dispute mechanisms.”
President Donald Trump imposed a 32 percent tariff on Indonesian goods but paused it until July 9 to allow time for trade negotiations. The Indonesian government signaled its willingness to “continue open dialogue and overcome negotiation challenges in tariffs and non-tariff barriers” earlier this month.
In April, Indonesia offered to buy $10 billion more in American crude oil and gas to balance its trade surplus with the United States. Industry analysts said Indonesia would probably have to reduce its oil and gas imports from suppliers in the Middle East and Africa to make room for increased U.S. imports.
Read the full article here