[By Guancha Observer Network, Zhang Jingjuan] US President Trump previously announced a 32% "reciprocal tariff" on Indonesia. In the face of the domineering US, Indonesia has compromised to the US.

According to the South China Morning Post on the 18th, Indonesia has promised to increase imports of up to $19 billion worth of goods from the US, including $10 billion in energy purchases. In addition, the country also plans to make other concessions in an effort to change the trade tariffs proposed by the US side. It is expected that Indonesia and the US will complete the negotiations within 60 days.

This morning, Indonesian Coordinating Minister for Economic Affairs Airlangga Hartarto met with his American counterparts in Washington along with other senior Indonesian officials to discuss bilateral trade issues.

Airlangga said that the proposed import list from Indonesia will cover agricultural products such as wheat and soybeans, and increase capital goods purchases from the US.

He added that Indonesia is also cooperating in acquiring critical mineral resources from the US and simplifying procedures for importing horticultural products from the US.

"We will also facilitate American companies operating in Indonesia regarding licenses and incentives," said Airlangga.

Indonesian Coordinating Minister for Economic Affairs Airlangga, South China Morning Post

Last week, Indonesian President Prabowo Subianto said that the Indonesian government will lift import quota restrictions on 127 categories of goods, including palm oil processing equipment and semiconductor raw materials, while retaining import controls on 43 strategic goods such as automotive parts and textiles. Additionally, Indonesia has promised to relax non-tariff barriers such as the "local content requirement," reducing the local content requirement for smartphone components from 40% to 30%.

This move aims to avoid the US imposing a 32% tariff on Indonesian export goods. Currently, the high tariff has been postponed for 90 days until July to allow both sides to negotiate.

After the meeting between the Indonesian delegation and US Trade Representative Jamieson Greer and US Commerce Secretary Howard Lutnick on April 17th, both parties agreed to complete the negotiations within 60 days.

The day before, Indonesian Foreign Minister Retno Marsudi met with US Secretary of State Rubio in Washington to discuss the comprehensive strategic partnership between the two countries and enhance defense and security cooperation.

They also discussed the issue of the US imposing reciprocal tariffs on Indonesia. Retno said that Indonesia is working to relax regulations by simplifying existing import rules to promote foreign investment. Retno also encouraged US investors to invest in key mineral sectors like nickel and other important areas.

In a statement issued after the meeting, Rubio welcomed Indonesia's efforts to implement economic reforms to establish fair and balanced trade relations.

Indonesian Foreign Minister Retno Marsudi (left) meeting with US Secretary of State Rubio, South China Morning Post

Krisna Gupta, senior researcher at the Center for International Policy Studies (CIPS) and Indonesian economist, told This Week in Asia, an Asian news media under the South China Morning Post, that the $19 billion commitment is a significant concession.

Krisna said although this may squeeze the import share of existing trading partners, Jakarta's strict control over agricultural products historically will make trade restructuring feasible. He added that in the long run, this will benefit Indonesian consumers and manufacturers by reducing costs and improving access conditions.

Analysts said that Indonesia's efforts to make trade concessions and relax non-tariff barriers aim to maintain its competitiveness and mitigate the impact of US tariffs on local industries.

Dandy Rafitrandi, an economic researcher at the Center for Strategic and International Studies (CSIS), said that labor-intensive industries such as apparel, footwear, and headwear account for nearly 30% of Indonesia's export structure in 2024 and are significantly affected by possible tariff policies.

He said, "Given the challenges currently faced by the industry, including layoffs and other issues, tariffs could cause serious problems for Indonesia."

Last week, Prabowo expressed confidence that Indonesia can fulfill its import commitments to the US and make trade concessions to the US, emphasizing that as the largest economy in Southeast Asia, "Indonesia is not a poor country."

Krisna said that it is commendable that the Indonesian government quickly sent a delegation to the US and finalized an agreement to be reached within 60 days. However, he reminded that Trump's unpredictability means that Indonesia must remain vigilant, "hoping that both sides can honor their agreements."

This article is an exclusive contribution from the Guancha Observer Network and cannot be reprinted without permission.

Original source: https://www.toutiao.com/article/7494675843873128972/

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