Optimism surrounds ongoing negotiations for a reciprocal tariff agreement between Indonesia and the United States, fueled by a close relationship between President Prabowo Subianto and US President Donald Trump. Chairman of the National Economic Council (DEN), Luhut Binsar Pandjaitan, stated on Friday that individuals close to President Trump have indicated respect for President Prabowo.
Negotiations Progress Despite Obstacles
While acknowledging minor issues in the negotiation process, Luhut expressed confidence that these are manageable. Coordinating Minister for Economic Affairs Airlangga Hartarto is leading the Indonesian negotiation team. A final agreement, including legal drafting, is expected to be signed by both presidents.
The potential agreement, slated for signing alongside President Prabowo’s visit to the Board of Peace (BoP) Summit, would involve Indonesia opening its market to US products and addressing non-tariff barriers. The United States, in turn, has committed to providing tariff exemptions for key Indonesian exports, including palm oil, cocoa, coffee, tea, and other strategic commodities.
What’s Next?
The Indonesian government is currently awaiting a final decision before formally signing the reciprocal tariff agreement. While the negotiation team has worked intensively, the timing of the final agreement remains dependent on completion of the legal drafting process and the presidents’ schedules. It is possible the agreement will be signed during President Prabowo’s visit to the BoP Summit, but this has not been confirmed.
Frequently Asked Questions
What is the current reciprocal tariff rate between Indonesia and the US?
Currently, Indonesia faces a reciprocal tariff of 19 percent.
Who is leading the Indonesian negotiation team?
Coordinating Minister for Economic Affairs Airlangga Hartarto is leading the Indonesian negotiation team.
What is included in the potential agreement?
The agreement includes Indonesia opening market access for US products, addressing non-tariff barriers, strengthening cooperation in digital trade and technology, national security, and other commercial cooperation.
As negotiations continue, what impact might a finalized agreement have on the trade relationship between Indonesia and the United States?
