JAKARTA — President Prabowo Subianto’s successful negotiations with United States President Donald Trump regarding the new tariff policy have brought many benefits to Indonesia.
Trade Minister Budi Santoso said Indonesia would gain at least two benefits from imposing a 19 percent export tariff on the US.
“So, there are two things we’re getting: inbound investment and an increase in our exports. So, our competitiveness is also improving,” Budi said at the Ministry of Trade office in Jakarta.
Budi emphasized that export opportunities to America are increasingly large and Indonesia must make optimal use of them.
“The opportunity to export to America is now even greater, so we are making the most of it,” he stressed.
According to Budi, Trump’s tariff of 19 percent is the lowest in the ASEAN region.
“Yes, for example, this is 19 percent, which is still the lowest in ASEAN. Hopefully, it will continue like that until August 1st, so it will automatically be like this,” he said.
He explained that before the tariffs were imposed, the US imposed the same tariffs on all countries.
Today, Indonesia has a competitive advantage due to lower tariffs compared to other countries.
“If we have advantages, it means we can attract foreign investment,” said Minister Budi.
“Foreign investment comes to Indonesia to be able to export to America,” he said.
President Prabowo, via his Instagram account @prabowo, said the 19 percent tariff agreement was best for Indonesia.
“I just had a very good conversation with President Donald Trump,” said the Head of State.
“We agreed to bring trade relations between Indonesia and the United States into a new era that is mutually beneficial for both our great nations,” he wrote on Wednesday (July 16).
Ronny P Sasmita, a senior analyst at the Indonesia Strategic and Economic Action Institution, assessed that the agreement was fair in a geopolitical context.
“Even though the term is reciprocal theory, reciprocity doesn’t necessarily mean that if you wear one, I also wear one,” he said.
Ronny added that the import requirements for energy, agriculture, and aircraft are a reasonable trade mechanism because Indonesia does not yet produce these commodities itself.
“So, everything we’ve imported so far will still be imported from America at zero tariffs, so it will be cheaper in Indonesia,” he said.
“It will benefit Indonesian companies and consumers,” he concluded. (*)
