Indonesia Seeks Lower Tariffs and Stronger Investment Ties with U.S. Amid Trade Talks
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JAKARTA, investortrust.id — Indonesia seeks to secure lower import tariffs and attract more U.S. investment through ongoing bilateral trade negotiations, aiming to improve the competitiveness of its export products amid a shifting global trade landscape.
Coordinating Minister for Economic Affairs Airlangga Hartarto said the Indonesian government’s top priority is to achieve more balanced tariff treatment from the United States, in line with what is applied to other major trading partners.
“Our goal, at both the maximum and minimum levels of this negotiation, is for Indonesia to receive lower and fairer tariffs — comparable to those granted to other countries,” Airlangga told reporters in Washington, D.C., on Thursday, April 17, 2025, or Friday local time in Jakarta.
The United States has announced a 32% reciprocal tariff regime on select imports, which is currently on hold for 90 days. However, the looming threat of implementation is already creating pressure for Indonesian exporters. Airlangga emphasized that Indonesia’s competitive edge, particularly against other ASEAN countries, would be undermined without improved access. Indonesian textile, electronics, apparel, and footwear products are among those most affected.
In addition to tariff reductions, Indonesia is pushing for increased U.S. foreign direct investment and reciprocal investment opportunities for Indonesian companies in the United States. The negotiation agenda also includes stronger cooperation in human capital development — particularly in education, science, technology, engineering, mathematics, and the digital economy.
Airlangga noted that Indonesia continues to expand its trade reach, citing progress in concluding the Indonesia-European Union Comprehensive Economic Partnership Agreement (IEU-CEPA). “We are also finalizing an agreement with Eurasian countries by June, and in discussions with Australia, they’ve committed to absorbing more Indonesian products,” he said.
The minister also reiterated Indonesia’s commitment to the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP), noting its potential to open new markets in Mexico, the United Kingdom, and other Latin American countries.
Meanwhile, to bolster domestic resilience and international competitiveness, Indonesia is preparing regulatory reforms aimed at improving ease of doing business — a strategy that goes beyond its current talks with Washington.
“This deregulation push is not limited to our negotiations with the U.S. It also forms part of broader economic pacts, including IEU-CEPA,” he said.
Mari Elka Pangestu, a member of Indonesia’s National Economic Council, said that the government is developing a comprehensive economic policy package to lower the high cost of doing business — a persistent challenge for domestic and foreign investors alike.
Mari added that Indonesia must also address long-term structural issues such as infrastructure bottlenecks, logistics costs, workforce skills, and innovation capacity to remain competitive.
In a separate discussion, Sudirman Said, Chair of the Harkat Negeri Institute and former energy minister, emphasized that any regulatory overhaul must involve input from multiple stakeholders to avoid the perception of backroom policymaking.
“It will take time, but if we can identify the sectors that matter most, we can gather meaningful input,” Sudirman said at Universitas Paramadina in Jakarta on Thursday.
He suggested benchmarking Indonesia’s regulatory reforms against successful ASEAN economies such as Vietnam. “Use proven models instead of venturing into opaque territory that’s hard to measure,” he said.