BUSINESS – Indonesia has announced plans to significantly increase imports from the United States, aiming to mitigate a potential 32% tariff on its exports. Chief Economic Minister Airlangga Hartarto, speaking from Washington, stated that the country intends to purchase up to $19 billion worth of U.S. goods, including approximately $10 billion in energy imports. This strategic move is designed to eliminate Indonesia’s trade surplus with the U.S. and avoid the threatened tariffs.
The proposed imports encompass a range of products, notably agricultural commodities such as wheat, soybeans, and soybean meal, as well as capital goods. Hartarto emphasized that this shift would involve reducing imports from other countries to accommodate the increased U.S. purchases.
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Industry stakeholders have expressed conditional support for the government’s decision. Ratna Sari Lopis, executive director of the Indonesian Wheat Flour Producers Association, stated, “We will support the government’s decision, as long as market prices and competitiveness are aligned.” In 2024, Indonesia sourced 40% of its wheat imports from Australia, 26% from Ukraine, 16% from Canada, and just under 4% from the U.S. Conversely, nearly 89% of Indonesia’s soybean imports originated from the U.S.
To facilitate this transition, Indonesia plans to streamline procedures related to American horticultural imports and simplify permitting and incentives for U.S. companies operating within the country. Additionally, discussions are underway to enhance cooperation on critical minerals. These developments follow meetings between Indonesian officials and U.S. counterparts, including the U.S. Trade Representative and the Secretary of Commerce. Both nations have agreed to finalize negotiations within the next 60 days, during a 90-day pause on the proposed tariffs.
Indonesia’s proactive approach underscores its commitment to maintaining favorable trade relations with the U.S., while balancing domestic economic interests and international obligations.
Source: Reuters
