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Indonesia Posts Trade Surplus With Iran in 2025

by Rachel Morgan News Editor
written by Rachel Morgan News Editor

Israel and the United States launched an attack on Iran on Saturday, February 28, 2026. In response, the Indonesian government, through its Ministry of Foreign Affairs, has called for restraint and a prioritization of dialogue and diplomacy from all involved parties.

Indonesia Offers Mediation

The Ministry of Foreign Affairs stated that Indonesia has offered to facilitate dialogue between the parties. According to the Ministry, the Indonesian President is prepared to travel to Tehran to mediate, should both parties agree.

Economic Ties Between Indonesia and Iran

Iran is a trading partner for Indonesia. Total trade between the two countries reached US$257.9 million in 2025, an increase of 18.71 percent compared to the US$217.3 million recorded in 2024.

Did You Know? In 2025, Indonesia’s trade balance with Iran recorded a surplus of US$240.2 million, a 23.10 percent increase compared to the previous year’s US$195.1 million.

Indonesia’s exports to Iran in 2025 totaled US$249.1 million, consisting entirely of non-oil and gas products. Key exports included fruit, vehicles and their parts, chemical products, animal and vegetable fats and oils, and wood products.

Imports from Iran reached US$8.8 million, comprised of US$0.5 million in oil and gas and US$8.4 million in non-oil and gas products. These imports included fruit, machinery, optical devices, organic chemicals, and electrical machinery.

Expert Insight: Indonesia’s offer to mediate highlights the country’s commitment to diplomatic solutions in international conflicts. Given the existing trade relationship, stability in the region is likely seen as beneficial to Indonesia’s economic interests.

Related Developments

The Ministry of Foreign Affairs’ statement followed condemnation of the US-Israel attack on Iran by the MUI, which also called the Board of Peace ineffective.

Frequently Asked Questions

What action has the Indonesian government taken in response to the attack?

The Indonesian government, through the Ministry of Foreign Affairs, has called for restraint and prioritized dialogue and diplomacy from all parties involved.

Has Indonesia offered to help resolve the conflict?

Yes, Indonesia has volunteered to facilitate dialogue and the Indonesian President is willing to travel to Tehran to mediate if both parties agree.

What is the current state of trade between Indonesia and Iran?

Total trade between Indonesia and Iran reached US$257.9 million in 2025, with Indonesia recording a trade surplus of US$240.2 million.

As the situation unfolds, what role might regional and international actors play in de-escalating tensions and fostering a path toward a peaceful resolution?

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Press Council Examines US Trade Deal’s Impact on Media Industry

by Rachel Morgan News Editor
written by Rachel Morgan News Editor

The Indonesian Press Council is assessing the potential impact of a new trade agreement with the United States on the country’s media industry. The council, which represents dozens of Indonesian media organizations, held a closed-door meeting on Thursday, February 26, 2026, to discuss its position on the Reciprocal Trade Agreement (ART).

Concerns Over Digital Platform Support

The core of the concern centers on Article 3.3 of the ART. The Publisher Rights Committee has identified this article as potentially problematic, as it removes the requirement for US-based digital platforms to financially support Indonesian news organizations through licensing agreements or profit-sharing.

Did You Know? Indonesia already has Presidential Regulation Number 32 of 2024, which outlines the responsibilities of digital platform companies to support quality journalism.

According to the text of Article 3.3, Indonesia must consult with the United States before entering into new digital trade agreements with other countries if those agreements could negatively affect American interests. This provision prevents Indonesia from requiring US digital service providers to financially support domestic news organizations, share data, or participate in revenue-sharing models.

Next Steps and Potential Outcomes

The Press Council has not yet determined whether it will formally oppose the agreement or request changes. Vice Chairperson Totok Suryanto stated that the council is awaiting a detailed explanation from the Coordinating Ministry for Economic Affairs, with a meeting scheduled for Friday, February 27, 2026.

Expert Insight: The Press Council’s concerns highlight the tension between fostering international trade and protecting domestic industries, particularly those facing financial pressures. The outcome of these discussions could significantly shape the future of journalism in Indonesia.

Totok Suryanto emphasized the importance of prioritizing the national press, noting that many media companies are already facing operational and financial difficulties, with journalists being laid off. This situation, he stated, is “worrying for the health of our democracy.”

Frequently Asked Questions

What is the Reciprocal Trade Agreement?

The Reciprocal Trade Agreement (ART) is a trade agreement between Indonesia and the United States, signed on February 19, 2026, intended to strengthen bilateral economic relations.

What specifically does Article 3.3 of the ART address?

Article 3.3 stipulates that Indonesia must consult the United States before entering new digital trade agreements with other countries that could threaten American interests, and prevents Indonesia from mandating financial support from US digital service providers to domestic news organizations.

What is the Press Council’s current position on the agreement?

The Press Council is preparing to clarify its stance and is awaiting further explanation from the Coordinating Ministry for Economic Affairs before deciding whether to formally reject or request revisions to the agreement.

As the Indonesian Press Council considers its response to the US trade agreement, what role should international trade play in supporting a sustainable and independent press?

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Indonesia poised for end to EU’s discriminatory palm oil rules as WTO deadline passes

by Rachel Morgan News Editor
written by Rachel Morgan News Editor

JAKARTA – Indonesia is pressing the European Union to adhere to a World Trade Organization (WTO) ruling concerning discriminatory policies impacting Indonesian palm oil exports, following the expiration of a 12-month implementation period on Tuesday.

Trade Dispute Escalates

Trade Minister Budi Santoso confirmed the finish of the “reasonable period of time” (RPT) granted by the WTO dispute settlement panel for the EU to revise regulations deemed inconsistent with global trade standards. Jakarta is now preparing to evaluate any adjustments made by Brussels, with a particular focus on the EU’s Indirect Land Use Change (ILUC) rules within the Renewable Energy Directive II (RED II).

Did You Know? The WTO issued its ruling in dispute case DS593 on January 10 of last year, finding the EU policies discriminatory.

“We urge the EU to immediately comply with the WTO panel ruling so that market access for Indonesian palm oil products in the EU can be quickly restored,” Minister Santoso stated on February 24.

WTO Findings

The WTO determined that EU policies unfairly disadvantaged biodiesel produced from Indonesian palm oil, offering more favorable treatment to similar products originating from the EU and other nations. This constituted a violation of the WTO’s principle of nondiscrimination. Indonesia has been monitoring the EU’s progress toward compliance since the WTO ruling was adopted on February 24, 2025.

During a WTO Dispute Settlement Body (DSB) session on January 27, the EU acknowledged that its policy adjustments to align with the ruling were not yet complete. Indonesia has prepared “various scenario options” in the event of continued non-compliance.

Expert Insight: This situation highlights the complexities of international trade disputes and the potential for protectionist measures to clash with established WTO principles. The outcome will likely depend on the EU’s willingness to address the concerns raised by the WTO and Indonesia, and could set a precedent for future trade negotiations.

The Indonesian government is coordinating with domestic business associations to ensure legal clarity for the palm oil industry. Minister Budi emphasized Indonesia’s commitment to sustainability but asserted that environmental concerns “cannot justify protectionist measures.”

The EU currently imposes countervailing duties ranging from 8 to 18 percent on Indonesian biodiesel, alleging unfair subsidies. But, the WTO found that Indonesia’s palm oil export duties and levies do not qualify as subsidies and that the EU failed to demonstrate material harm to European biofuel producers.

Following its WTO victory, Indonesia established a 6.7 percent growth target for biodiesel exports to the EU in 2026, aligning with the average growth rate of the past four years.

Frequently Asked Questions

What is the core of the dispute?

The dispute centers on EU policies that the WTO found unfairly discriminated against biodiesel made from Indonesian palm oil, treating it less favorably than similar products from the EU and other countries.

What happens now that the RPT has expired?

Indonesia will now assess whether the EU has eliminated its discriminatory rules, evaluating any regulatory changes, methodological adjustments, and their impact on trade flows.

What is Indonesia’s export target for biodiesel to the EU?

Indonesia has set a 6.7 percent growth target for biodiesel exports to the EU in 2026, consistent with the average export growth recorded over the previous four years.

How will the outcome of this dispute affect the broader landscape of international trade and sustainability policies?

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Indonesia’s BPJPH Assures Public of Strict US Halal Standards

by Rachel Morgan News Editor
written by Rachel Morgan News Editor

Indonesia’s Halal Product Assurance Organizing Agency (BPJPH) has moved to reassure consumers that U.S. Products imported into Indonesia will continue to be subject to halal certification requirements. The statement from BPJPH head Ahmad Haikal Hasan came amid circulating reports that a recent trade agreement between Indonesia and the United States would eliminate the need for halal labeling on U.S. Goods.

Responding to Trade Deal Concerns

Haikal dismissed these reports as inaccurate, emphasizing that the U.S. Has maintained halal standards for decades, since the establishment of the Islamic Food and Nutrition Council of America (IFANCA) in 1974. He stated, “I am not defending America. Instead, America is more stringent in halal matters because it has implemented halal regulations since 1974.”

Did You Know? The Islamic Food and Nutrition Council of America (IFANCA) was established in 1974.

According to Haikal, halal certificates issued by accredited U.S. Bodies are recognized by the BPJPH, Indonesia’s official halal authority. This recognition is formalized through a Mutual Recognition Agreement (MRA) that predates the recently signed trade agreement between President Prabowo Subianto and U.S. President Donald Trump.

The MRA streamlines the certification process; once a U.S. Halal authority issues certification, Indonesian authorities only need to register the product, rather than re-examine its halal status. While the trade agreement signed on February 19, 2026, does grant halal certification exemptions for certain U.S. Products – including cosmetics, medical devices, and manufactured goods – these products still require distribution permits from Indonesia’s Food and Drug Monitoring Agency (BPOM).

Expert Insight: The reaffirmation of halal requirements, even within a novel trade agreement, underscores Indonesia’s commitment to its domestic regulatory standards and its large Muslim consumer base. The Mutual Recognition Agreement provides a mechanism for facilitating trade while upholding those standards.

Haikal stressed transparency in the process, stating, “Do not worry. In terms of halal, nothing is kept secret, nothing is concealed. We find no violations.”

Frequently Asked Questions

Are U.S. Products entering Indonesia required to have a halal label?

Yes, according to BPJPH head Ahmad Haikal Hasan, the information circulating that American products entering Indonesia do not require a halal label is not true.

What is the role of the Mutual Recognition Agreement (MRA)?

The MRA formalizes mutual acknowledgment of halal standards between BPJPH and foreign halal institutions in the U.S., streamlining the certification process.

Do all U.S. Products entering Indonesia require halal certification?

While most products do, the trade agreement granted certain halal certification exemptions for categories like cosmetics, medical devices, and manufactured goods. However, cosmetics and medical devices still require distribution permits from Indonesia’s Food and Drug Monitoring Agency (BPOM).

How might this situation evolve as the Indonesia-U.S. Trade agreement is implemented and interpreted by businesses and regulatory bodies?

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The US Supreme Court’s take-down of Trump’s tariffs explained

by Chief Editor
written by Chief Editor

Supreme Court Strikes Down Trump Tariffs: What It Means for Global Trade

The US Supreme Court has delivered a significant blow to former President Donald Trump’s trade policies, ruling that his imposition of tariffs on foreign imports exceeded his constitutional authority. The 6-3 decision invalidates tariffs implemented under emergency economic powers, sparking both outrage from the former president and a scramble to understand the implications for international commerce.

The Constitutional Question: Congress, Not the President, Holds the Tariff Power

At the heart of the case was a fundamental question of constitutional power. The US Constitution explicitly grants Congress the authority to impose tariffs, not the president. Trump attempted to circumvent this by declaring national emergencies – one related to public health concerns stemming from illegal drugs like fentanyl and another framed as addressing trade deficits – and invoking the International Emergency Economic Powers Act (IEEPA). He believed this allowed him to enact “emergency tariffs” without congressional approval.

Businesses and a dozen US states challenged this move, arguing that the president could not unilaterally expand his powers through emergency declarations. The Supreme Court ultimately sided with the challengers, affirming a previous ruling by the US Court of International Trade that the tariffs were illegal.

Which Tariffs Were Affected?

The ruling specifically impacts the country-specific tariffs Trump imposed under these emergency orders, such as the 10% tariff on imports from Australia. However, tariffs on specific products – including aluminum, steel, copper, wood, vehicles, auto parts, and furniture – remain in place, as they were enacted under different legislation. As one expert noted, expect to see “tariffs on things rather than tariffs on countries” going forward.

Trump’s Response and Potential Workarounds

Trump reacted angrily to the decision, calling it “ridiculous” and the justices involved “very unpatriotic.” He immediately signed an order imposing a novel 10% tariff on many foreign imports under a different section of trade law, allowing him to do so for up to 150 days. He has also pledged to explore other avenues to reinstate broader tariffs permanently.

US Trade Representative Jamieson Greer indicated that the administration would consider fast-tracked investigations under Section 301 of the Trade Act, which allows tariffs to be imposed if unfair trade practices are identified.

Why Not Seek Congressional Approval?

Despite Republicans controlling Congress, securing legislative approval for tariffs is far from guaranteed. Their slim majority in the House of Representatives means any bill would require near-unanimous support within the party, which is unlikely given recent votes demonstrating internal dissent on trade issues.

What Does This Mean for Australia?

The initial 10% “baseline” tariff on Australian imports has been replaced by a new 10% tariff imposed under Section 122 of the Trade Act. However, this new tariff is limited to 150 days. Experts suggest Trump has lost a key tool for pressuring other countries, as Australia, and others, can likely “outwait” the temporary tariff.

EY Australia estimates that Australian companies could be owed $1.4 billion in refunds from previously paid tariffs.

Refund Process and Potential Recovery

Businesses eligible for refunds can pursue them through existing US Customs and Border Protection (CBP) processes, including “post summary corrections” and “protest” procedures. Australian exporters with US subsidiaries may be able to claim refunds through those entities, and those with cost-sharing agreements with US importers may also be able to recoup expenses.

FAQ: Understanding the Supreme Court Ruling

  • What exactly did the Supreme Court rule? The Court ruled that President Trump did not have the authority under IEEPA to impose tariffs without congressional approval.
  • Which tariffs are still in effect? Tariffs on specific products (steel, aluminum, etc.) imposed under different legislation remain in place.
  • Will companies receive refunds for tariffs already paid? It’s likely, but the process is unclear and may require legal action.
  • What is Section 301 of the Trade Act? It allows the president to impose tariffs if investigations identify unfair trade practices by other countries.

Did you know? The history of US tariffs can be divided into three periods: a revenue period (1790-1860), a restriction period (1861-1933), and a reciprocity period (1934 onwards).

Pro Tip: Businesses impacted by these changes should consult with legal and trade experts to understand their rights and options for recovering previously paid tariffs.

Stay informed about evolving trade policies and their impact on your business. Explore our other articles on international trade and economic regulations for further insights.

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US Supreme Court strikes down Donald Trump’s global tariffs

by Chief Editor
written by Chief Editor

Supreme Court Ruling on Tariffs: What It Means for US Trade and Global Relations

The US Supreme Court recently delivered a significant blow to the Trump administration’s trade policies, ruling that the use of the International Emergency Economic Powers Act (IEEPA) to impose tariffs was unlawful. This decision, while cheered by business groups, doesn’t necessarily signal the end of tariffs, but rather a shift in the legal landscape governing their implementation. The ruling has implications for US relationships with Mexico, China, and other trading partners.

The Core of the Ruling: IEEPA and Presidential Authority

The court found that IEEPA, intended for responding to national emergencies, does not explicitly grant the president the power to impose tariffs. Chief Justice John Roberts stated the act “contains no reference to tariffs or duties.” This limits the president’s ability to unilaterally impose broad tariffs based solely on claims of national emergency. While the ruling was split, with conservative justices dissenting, the majority opinion underscores the importance of Congressional authority over trade policy.

Impact on US-Mexico Trade Dynamics

The decision comes at a time of increasing tension in US-Mexico relations, particularly regarding security cooperation and drug trafficking. The Trump administration had previously considered tariffs as leverage to pressure Mexico to address these issues. While this avenue is now legally constrained, pressure is likely to continue, potentially through other mechanisms. Mexico’s recent move to raise tariffs on countries without trade agreements – notably China – may be seen as a strategic response to US pressures and a way to bolster its position in trade negotiations.

China and the Shifting Trade Triangle

The ruling also affects the US-China trade relationship. As impediments to direct US-China trade have expanded, Mexico has become the United States’ top trading partner. China’s increasing “nearshoring” of companies to Mexico, establishing manufacturing hubs to export to the US, has drawn scrutiny from Washington. Mexico’s new tariffs on Chinese goods, implemented in December 2025, are intended to protect domestic industries and satisfy pressure from the US to build a tariff wall against China. This creates a complex economic triangle where Mexico is balancing its relationships with both superpowers.

Financial Implications and Potential for Reinstatement

The financial implications of the ruling are substantial. EY-Parthenon estimates the loss of IEEPA tariff revenues for the US Government could amount to around $140 billion. However, experts warn that tariffs ruled illegal can be rapidly reinstated via other legal levers. KPMG chief economist Diane Swonk cautioned that financial markets rallying on the news may be premature. The degree to which importers can receive refunds for previously paid tariffs remains uncertain and will likely be subject to further litigation.

Global Reactions and Future Trade Strategies

The European Union, Britain, and Canada have all responded to the ruling. Canada affirmed that Trump’s tariffs were “unjustified.” The decision is expected to constrain the president’s ambitions to impose broad tariffs “on a whim,” but doesn’t eliminate the possibility of targeted tariffs implemented through other statutes. This suggests a more cautious and legally constrained approach to trade policy moving forward.

FAQ

Q: Does this ruling eliminate all tariffs?
A: No, it limits the president’s authority to impose tariffs under IEEPA. Other legal avenues for tariffs still exist.

Q: What does this mean for US-Mexico relations?
A: While the legal basis for tariffs as leverage is weakened, pressure on Mexico regarding security and trade is likely to continue.

Q: Will importers receive refunds for tariffs already paid?
A: The extent of refunds is uncertain and will likely be litigated.

Q: How does this affect China?
A: Mexico’s tariffs on Chinese goods, combined with the US focus on reducing reliance on Chinese supply chains, create a more complex trade dynamic.

Did you know? The average effective tariff rate faced by consumers is now 9.1%, down from 16.9% following the ruling, but still the highest since 1946 (excluding 2025).

Pro Tip: Businesses involved in international trade should closely monitor developments in trade policy and consult with legal experts to ensure compliance.

Explore our other articles on international trade and US-Mexico relations for more in-depth analysis. Subscribe to our newsletter for the latest updates on global economic trends.

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Indonesia President Prabowo to visit Washington for Board of Peace, tariff deal

by Rachel Morgan News Editor
written by Rachel Morgan News Editor

JAKARTA – President Prabowo Subianto is scheduled to travel to the United States next week, with the inaugural Board of Peace meeting and a reciprocal tariff agreement poised to be central to his agenda.

Board of Peace Meeting and Indonesian Role

Dozens of world leaders from 21 member states are expected to convene in Washington on February 19 for the first meeting of the Board of Peace, which aims to manage Gaza’s postwar governance. While the White House has not formally announced the meeting, invitations have reportedly been extended to several countries. Discussions are anticipated to focus on funding for Gaza’s reconstruction and broader recovery efforts.

Did You Know? Indonesia is the only country to have publicly pledged troops to the International Stabilization Force (ISF).

President Prabowo has confirmed his attendance, as stated by Foreign Ministry spokesperson Yvonne Mewengkang. Indonesia intends to leverage the board to advocate for the protection of civilians, encourage the recovery and reconstruction of Gaza, and pursue a two-state solution for Palestine. President Prabowo’s participation, according to Mewengkang, demonstrates Indonesia’s commitment to actively shaping the board’s direction from its inception.

Indonesia, a long-time supporter of the Palestinian cause, has faced criticism for joining the Board of Peace, a platform criticized for lacking Palestinian representation and perceived US dominance. Led by US President Donald Trump, the board is set to oversee Gaza’s interim administration, coordinate aid distribution, and shape the territory, with details such as rules of engagement still unresolved.

Recent reports from Israeli media suggest the security component of Gaza’s postwar plan could be implemented following the Washington talks, with the ISF expected to deploy in phases. The Indonesian Military (TNI) is preparing personnel, awaiting final deployment approval from President Prabowo, anticipated by the end of the month.

Tariff Agreement with the US

Alongside the Board of Peace meeting, President Prabowo is expected to sign the Agreement of Reciprocal Tariff (ART). Coordinating Economy Minister Airlangga Hartarto stated the government is scheduling the ART finalization to coincide with the February 19 meeting.

Expert Insight: The simultaneous pursuit of diplomatic engagement through the Board of Peace and economic gains via the tariff agreement suggests Indonesia is attempting to balance its longstanding foreign policy commitments with emerging economic opportunities.

US Trade Representative Jamieson Greer indicated the trade deal should be finalized in the coming weeks. The agreement would reduce US duties on Indonesian exports from 32 percent to 19 percent and eliminate tariffs on 99 percent of US goods entering Indonesia. Talks were previously delayed due to factors including the US government shutdown and disagreements over Jakarta’s obligation to consult with Washington on digital trade agreements. However, Airlangga asserted on February 3 that all issues have been resolved.

Frequently Asked Questions

What is the Board of Peace?

The Board of Peace, chaired by US President Donald Trump, is intended to oversee Gaza’s postwar governance, coordinate aid distribution, and shape the territory.

What role will Indonesia play in Gaza?

Indonesia is prepared to send up to 8,000 troops as part of the International Stabilization Force (ISF) to help maintain stability during the second phase of the Gaza peace plan.

What are the key benefits of the new tariff agreement?

The agreement will lower US duties on Indonesian exports from 32 percent to 19 percent and eliminate tariffs on 99 percent of US goods entering Indonesia.

As Indonesia navigates these complex international engagements, how might these developments reshape its role on the global stage?

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Pakistan FM Dar, Indonesian minister reaffirm trade, investment as key pillars of bilateral cooperation

by Rachel Morgan News Editor
written by Rachel Morgan News Editor

Islamabad – Deputy Prime Minister Ishaq Dar and Indonesia’s investment minister Rosan Roeslani met Tuesday to reaffirm trade and investment as central to the relationship between their countries.

Strengthening Economic Ties

The meeting at the Ministry of Foreign Affairs focused on bolstering economic and investment connections between Pakistan and Indonesia, according to the Foreign Office. Roeslani, who also serves as the chief executive officer of Indonesia’s Sovereign Wealth Fund (Danantara), arrived in Islamabad Monday evening.

Did You Know? Indonesian President Prabowo Subianto visited Pakistan in December 2025, meeting with President Asif Ali Zardari and PM Shehbaz Sharif to discuss enhanced bilateral trade, and cooperation.

Discussions included potential collaborative projects and an exchange of views on sovereign wealth fund models. Both sides also reviewed opportunities for cooperation in sectors such as health. Presentations were given by Pakistan’s finance ministry, the Special Investment Facilitation Council (SIFC), and the Board of Investment (BoI), outlining Pakistan’s investment landscape and seeking Indonesian expertise.

Recent Diplomatic Activity

The meeting follows a series of visits from Indonesian officials in recent months. In January, Indonesian Vice Minister of Trade Dyah Roro Esty Widya Putri signed a memorandum of understanding with Commerce Minister Jam Kamal Khan to establish an Indonesia-Pakistan Joint Trade Committee. Also in January, Indonesian Defence Minister Sjafrie Sjamsoeddin met with Pakistani military leaders to discuss expanding defence ties.

Expert Insight: The sustained high-level engagement between Pakistan and Indonesia suggests a deliberate effort to deepen the bilateral relationship, potentially leveraging Indonesia’s sovereign wealth fund expertise to attract investment into Pakistan’s priority sectors.

Dar reaffirmed Pakistan’s commitment to a longstanding partnership with Indonesia, emphasizing the role of mutual investment. The meeting was attended by senior officials including SIFC National Coordinator Lt Gen Sarfraz Ahmed and Health Minister Mustafa Kamal.

Frequently Asked Questions

What was the primary focus of the meeting between Dar and Roeslani?

The primary focus was on strengthening economic and investment ties between Pakistan and Indonesia, and reaffirming trade and investment as key pillars of their bilateral cooperation.

Who is Rosan Roeslani?

Rosan Roeslani is Indonesia’s investment minister and also the chief executive officer of Indonesia’s Sovereign Wealth Fund (Danantara).

What other recent diplomatic exchanges have occurred between Pakistan and Indonesia?

Recent exchanges include a visit by Indonesian President Prabowo Subianto in December 2025, a visit by Indonesian Vice Minister of Trade Dyah Roro Esty Widya Putri in January, and a visit by Indonesian Defence Minister Sjafrie Sjamsoeddin in January.

As Pakistan and Indonesia explore potential collaboration on sovereign wealth fund models and investment opportunities, what impact might these discussions have on Pakistan’s economic development in the coming years?

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Customs in the Age of Tariffs: Advice From the Experts

by Chief Editor
written by Chief Editor

Tariff Tsunami: Navigating the New Era of Trade Compliance

A resurgence of protectionist trade policies has brought tariff rates to levels not seen since the Great Depression, forcing businesses to adapt to a dramatically changed import landscape. The Trump administration’s aggressive utilize of the International Emergency Economic Powers Act (IEEPA) has ushered in an era of heightened scrutiny and enforcement, demanding a new level of diligence from importers.

The DOJ’s Sharpened Focus on Trade Fraud

The Department of Justice (DOJ) has taken a particularly assertive stance, launching a Trade Fraud Task Force last fall. This collaborative effort, bringing together the Department of Homeland Security, Customs and Border Protection (CBP), and Immigration and Customs Enforcement (ICE), signals a zero-tolerance approach to tariff evasion and fraud. Activities like misclassification, undervaluation, and transshipment are now under intense investigation.

Beyond “Reasonable Care”: The Risk of DOJ Involvement

Companies are discovering that a demonstration of “reasonable care” – traditionally sufficient when dealing with CBP – may not be enough to avoid scrutiny from the DOJ. William Jansen, director of customs brokerage services at Seko Logistics, emphasizes the difference: “The difference in dealing with customs and explaining that you acted reasonably is very different than with the DOJ.” A criminal prosecutor is less likely to be sympathetic to unintentional errors than a customs official.

The case of Samsung C&T America, Inc., which paid $1 million in a 2023 settlement for misclassifying footwear, illustrates this point. What might be considered a minor oversight in footwear design and construction can quickly escalate into a significant legal issue when the DOJ is involved.

Leveraging Compliance Tools and Strategies

In this environment, proactive compliance is paramount. Jansen recommends a thorough review of import declarations and documentation: “Are my current declarations defensible? Does the documentation line up? Is there a paper trail?” He warns that many companies underestimate the level of detail required.

The First Sale Rule: A Potential Cost Saver

Despite the increased scrutiny, opportunities exist to mitigate tariff burdens. The First Sale rule, allowing importers to pay duties on the lower price of the initial transaction in multi-tiered supply chains, can significantly reduce costs. However, successful application requires meticulous documentation and adherence to stringent conditions.

This represents particularly relevant in industries like apparel and footwear, where transactions often involve multiple intermediaries.

Preparing for a Supreme Court Decision

With the fate of Trump’s IEEPA tariffs potentially resting with the Supreme Court, companies are increasingly seeking legal counsel to understand their rights and responsibilities. Experts advise tracking liquidation dates – the final assessment of duties – and preparing to file protests or pursue refunds if the high court invalidates the tariffs.

Nicole Bivens Collinson, managing principal at Sandler, Travis & Rosenberg, P.A., stresses the importance of maintaining comprehensive records, mirroring the documentation requirements of the Uyghur Forced Labor Prevention Act (UFLPA). Supply chain traceability, from raw materials to finished goods, is now essential.

Sourcing Strategies in a Shifting Landscape

Companies are also re-evaluating their sourcing strategies, exploring alternative locations to minimize tariff exposure. While many trading partners face duty burdens, identifying more advantageous options remains a priority.

FAQ: Navigating the New Tariff Landscape

Q: What is the First Sale rule?
A: It allows importers to pay duties on the price of the first sale in a multi-tiered transaction, potentially reducing costs.

Q: What is liquidation in the context of customs?
A: It’s the final assessment of duties owed on an import, typically occurring around 314 days after entry into the U.S.

Q: Why is documentation so important?
A: Thorough documentation is crucial for demonstrating “reasonable care” to CBP and defending against potential DOJ investigations.

Q: What is the Trade Fraud Task Force?
A: A DOJ-led initiative combining resources from multiple agencies to aggressively combat tariff evasion and fraud.

Did you know? The DOJ is taking a significantly harder line on tariff violations than CBP traditionally has, making robust compliance programs more critical than ever.

Pro Tip: Regularly monitor liquidation dates for your imports and be prepared to file protests or pursue refunds if the Supreme Court rules against the IEEPA tariffs.

Stay informed about evolving trade policies and prioritize meticulous recordkeeping to navigate this complex landscape.

Explore our other articles on trade compliance and supply chain management for more insights.

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Egypt: U.S. Deputy Secretary of State Visits Cairo to Strengthen the U.S.-Egypt Strategic Partnership

by Chief Editor
written by Chief Editor

Strengthening Ties: The Future of US-Egypt Collaboration

Recent talks between U.S. Deputy Secretary of State Christopher Landau and Egyptian officials signal a deepening strategic partnership, extending beyond traditional security concerns into burgeoning fields like technology and economic innovation. This isn’t simply a continuation of existing policy; it’s a recalibration for a rapidly changing geopolitical landscape.

Beyond Security: A New Economic Focus

For decades, the U.S.-Egypt relationship has been heavily weighted towards military aid and counter-terrorism cooperation. While these aspects remain crucial – particularly given regional instability in Sudan and Libya, as highlighted by Landau’s discussions – the emphasis is demonstrably shifting. The focus on science, space, technology, and AI represents a strategic investment in Egypt’s future and a recognition of its potential as a regional economic hub.

This pivot aligns with broader U.S. foreign policy goals. The Biden administration, and continuing under the Trump administration, has consistently emphasized the importance of “friend-shoring” and diversifying supply chains. Egypt, with its strategic location and growing young population, offers a compelling alternative to traditional manufacturing centers. According to the World Bank, Egypt’s GDP is projected to grow steadily in the coming years, fueled by infrastructure projects and private sector investment.

The Tech Sector: A Hotbed of Opportunity

Landau’s meetings with American tech companies and Egyptian government representatives weren’t coincidental. Egypt is actively courting foreign investment in its digital infrastructure. The government’s “Digital Egypt” vision aims to transform the country into a regional leader in IT and digital services. This includes initiatives like the development of smart cities, expansion of broadband access, and the promotion of a thriving startup ecosystem.

Pro Tip: For U.S. tech companies looking to expand internationally, Egypt offers a relatively low-cost operating environment, a skilled workforce (particularly in engineering and computer science), and access to a large and growing consumer market. However, navigating the regulatory landscape requires careful planning and local partnerships.

The Grand Ethiopian Renaissance Dam (GERD): A Continued Point of Negotiation

Landau’s mention of President Trump’s pledge to assist Egypt and Ethiopia in reaching an agreement on the GERD underscores the continued U.S. involvement in resolving this critical water security issue. The dam has been a source of tension between the three countries (Egypt, Ethiopia, and Sudan) for years, with Egypt fearing a significant reduction in its Nile River water supply. The U.S. role as a mediator is likely to remain vital, particularly as climate change exacerbates water scarcity in the region.

Cultural Exchange and Soft Power

Landau’s visit to the Grand Egyptian Museum and the Pyramids wasn’t merely symbolic. It highlighted the importance of cultural exchange and “soft power” in strengthening bilateral ties. The U.S. recognizes Egypt’s rich cultural heritage as a valuable asset and a source of tourism revenue. Supporting the preservation and promotion of Egyptian culture aligns with U.S. interests in fostering mutual understanding and goodwill.

Did you know? The American University in Cairo (AUC), visited by Landau, has been a cornerstone of U.S.-Egypt educational and cultural exchange for over a century, producing generations of Egyptian leaders and fostering strong ties between the two countries.

Future Trends to Watch

  • Increased Investment in Renewable Energy: Egypt is aggressively pursuing renewable energy projects, particularly solar and wind power. This presents significant opportunities for U.S. companies specializing in clean energy technologies.
  • Expansion of Cybersecurity Cooperation: As Egypt’s digital infrastructure expands, cybersecurity becomes increasingly critical. Expect greater collaboration between the U.S. and Egypt in this area.
  • Focus on Entrepreneurship and Innovation: Egypt’s burgeoning startup scene is attracting international attention. U.S. venture capital firms are likely to increase their investments in Egyptian startups.
  • Deepening Space Cooperation: Egypt has expressed interest in developing its space program. Collaboration with U.S. space agencies could accelerate this process.

FAQ

  • What is the main goal of the U.S.-Egypt strategic partnership? To promote regional security, bolster economic prosperity, and foster mutual understanding between the two countries.
  • What sectors are seeing increased U.S. investment in Egypt? Technology, renewable energy, infrastructure, and tourism.
  • What is the U.S. role in the GERD dispute? The U.S. is acting as a mediator to help Egypt, Ethiopia, and Sudan reach a mutually acceptable agreement.
  • How important is cultural exchange in the U.S.-Egypt relationship? It is considered vital for fostering goodwill and strengthening long-term ties.

To stay informed about the U.S.-Egypt partnership, visit the U.S. Embassy in Cairo’s website and follow @USEmbassyCairo on social media.

What are your thoughts on the evolving U.S.-Egypt relationship? Share your insights in the comments below!

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