Indonesia Eases U.S. Tech Access, Lifts Non-Tariff Barriers to Avoid 32% Trade Tariff

---

JAKARTA, Investortrust.id — President Prabowo Subianto has agreed to a series of trade concessions aimed at averting a threatened 32% tariff on Indonesian goods entering the United States.

The measures, negotiated by the Coordinating Ministry for Economic Affairs, include the removal of six major non-tariff barriers that had hindered U.S. exports. These reforms form part of a broader reciprocal tariff negotiation initiated after a formal letter from U.S. President Donald Trump raised the specter of punitive trade measures against Indonesia.

The first reform involves deregulating import licensing, marked by changes to Trade Ministry Regulation No. 8 of 2024, which governs import policies and procedures.

Secondly, Indonesia has relaxed its local content requirements—known as TKDN—for certain American products, particularly in the tech and data center sectors. The policy shift directly benefits companies like Apple and General Electric, enabling their products to enter the Indonesian market without facing restrictive local manufacturing requirements.

The third concession commits Indonesia to improve intellectual property rights enforcement, a long-standing demand from Washington.

In addition, the government will now recognize U.S. certifications issued by the Food and Drug Administration (FDA), a move expected to ease the entry of American food, beverages, and pharmaceuticals.

The fifth reform involves aligning automotive product standards with the U.S. Federal Motor Vehicle Safety Standards (FMVSS), facilitating the flow of American-made vehicles and parts.

Lastly, Indonesia will adopt and enforce Sanitary and Phytosanitary Standards (SPS), the World Trade Organization’s framework to ensure food safety and biosecurity. This opens the door for imports of U.S. agricultural and livestock products, such as soybeans, wheat, and cotton, while still allowing Indonesia to apply its own risk assessments and inspections.

“They want market access for their agricultural goods. That’s fine—as long as we retain SPS oversight,” an official from the Coordinating Ministry told Investortrust.

Trade, Procurement, and Investment Commitments

Alongside regulatory adjustments, Indonesia has committed to purchasing U.S. goods and energy worth $34 billion—far exceeding America’s $19 billion trade deficit with Indonesia.

These purchases are largely business-to-business transactions. For instance, Indonesian companies agreed to import $4.5 billion worth of soybeans, soybean meal, wheat, and cotton from the United States.

In the energy sector, PT Kilang Pertamina has struck deals with ExxonMobil, Chevron, and KDT Global Resource valued at $15 billion.

Indonesia also signaled investment cooperation through the establishment of new projects. A $2 billion investment by Indonesian chemical manufacturer Indorama in a blue ammonia facility in Louisiana, U.S., is among the flagship deals.

Meanwhile, the U.S. Development Finance Corporation (DFC) is expected to collaborate with BPI Danantara, a state-backed investment entity under the Prabowo administration, to unlock additional U.S.-Indonesia co-investment opportunities.

“These moves gave confidence to the U.S. Commerce Secretary and USTR [U.S. Trade Representative],” said a senior Indonesian official involved in the talks.