Indonesia Excludes Alcohol and Pork from US Tariff Cuts as Joint Trade Deal Nears Finalization
Main Takeaways
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JAKARTA, Investortrust.id – Indonesia has excluded alcoholic beverages and pork from its sweeping zero-tariff policy for US goods, even as the two countries edge closer to finalizing a joint agreement on reciprocal tariffs and trade facilitation.
Out of 11,552 product codes listed under the Harmonized System (HS) for imports from the United States, 11,474—or 99%—will enjoy a 0% import duty into Indonesia. The remaining 78 HS codes, or 0.67%, include items such as alcohol and pork, which the Indonesian government has decided not to liberalize.
“There are a few products we have agreed not to include in the zero-tariff list, and the US has accepted that,” said Secretary of the Coordinating Ministry for Economic Affairs Susiwijono Moegiarso in Jakarta on Friday, July 18, 2025.
“Alcoholic beverages are among the excluded items. And even though we don’t import it, we’ve also asked for pork to be excluded,” Susiwijono explained.
The decision aligns with similar 0% tariff schemes implemented under Indonesia’s various trade agreements—including the ASEAN Trade in Goods Agreement (ATIGA), Free Trade Agreements (FTA), and Comprehensive Economic Partnership Agreements (CEPA)—with countries such as Australia, New Zealand, and Japan.
“For instance, under ATIGA, 99% of intra-ASEAN trade is already under a zero-tariff regime. With Australia, that figure is around 94–95%, and with Japan, about 91%,” Susiwijono said.
Further Quid pro Quo
Indonesian officials believe there is room to negotiate further, particularly on key commodities highly demanded by the U.S. The country is negotiating 0% US tariffs for several of its own export products—particularly those not manufactured domestically in the United States, like cocoa, rubber, crude palm oil and nickel.
“There are several Indonesian products that are essential for the U.S. market—commodities they cannot produce themselves,” Susi noted. In exchange, Indonesia offered to exempt U.S. technology products from its "local content" rules, which require companies to use locally-made components in its manufacturing.
Currently, the ministry has tasked Deputy for Economic Cooperation and Investment Coordination Edi Prio Pambudi and Assistant Deputy for American and Pacific Economic Cooperation Irwan Sinaga to lead the ongoing negotiations.
These negotiations are part of a broader reciprocal trade deal that will be formalized through a joint statement covering tariff arrangements, non-tariff barrier resolutions, and investment terms.
“The joint statement will outline tariff adjustments, the status of non-tariff issues, and the flow of investments between the two countries,” Susiwijono said on Tuesday, May 27, 2025.
17-Minute Phone Call
The latest push for deeper trade cooperation follows a high-level phone call between President Prabowo Subianto and US President Donald Trump on Tuesday, July 15, 2025. The 17-minute call, described as cordial yet strategic, resulted in the US agreeing to reduce import duties on Indonesian goods from 32% to 19%, effective Thursday, Aug. 1, 2025.
“This was a tough negotiation, but both presidents reached a common ground,” said Cabinet Secretary Teddy Indra Wijaya. “President Prabowo personally led the talks with President Trump, both known for their strong negotiating styles.”
Officials have framed the development as a major win for Indonesia’s economic diplomacy. The tariff reduction places Indonesia among the select few Asian countries granted low-duty access to the US market.
The agreement with the US also follows Indonesia’s successful zero-tariff pact with the European Union, signaling Jakarta’s more assertive global trade posture. Coordinating Minister for Economic Affairs Airlangga Hartarto is tasked with overseeing implementation of the US deal.