By: Silvia AP )*
The Indonesian government’s move to form a Deregulation Task Force marks a strategic response in facing increasingly complex global trade dynamics, especially after the new import tariff policy imposed by the United States. This situation is not only related to economic issues alone, but also reflects how developing countries such as Indonesia formulate economic diplomacy tactics in a global framework full of interests.
The United States (US), as one of Indonesia’s main trading partners, has a strategic position in the national export map. However, the increasingly strong protectionist policy under the pretext of protecting the US domestic industry has created its own pressures for partner countries, including Indonesia. The import tariffs imposed not only target manufactured products, but also superior commodities that have been the mainstay of Indonesian exports, such as rubber, textiles, and electronics. With the implementation of these additional tariffs, export costs have increased significantly and reduced the competitiveness of Indonesian products in the US market. This has a direct impact on the domestic industrial sector, especially the labor-intensive sector which is vulnerable to fluctuations in global demand.
Realizing the complexity of the challenges, the Indonesian government has taken tactical steps. President Prabowo Subianto formed the Deregulation Task Force (Satgas Deregulasi) to face the threat of import tariffs imposed by United States (US) President Donald Trump.
The task force was formed in line with the government’s efforts to lobby the US to remove the 32 percent tariff on Indonesian goods. One of Indonesia’s offers is to simplify import-export regulations with the US. Coordinating Minister for the Economy Airlangga Hartarto said the Deregulation Task Force will take care of the relaxation of a number of import-export regulations with the US. One of the tasks of the Deregulation Task Force is to take care of the Domestic Component Level (TKDN) policy which is planned to be relaxed or TKDN flexibility, especially in the Information, Communication and Technology (ICT) sector.
Previously, President Prabowo Subianto responded to US President Donald Trump’s trade tariff attacks without fighting back. President Prabowo said that Indonesia was willing to open the door to imports for the US. The President ordered his subordinates to no longer limit imports using quotas, and also asked for the TKDN requirements to be reviewed. The two regulations have indeed been highlighted by the United States Trade Representative (USTR) regarding the determination of the 32 percent tariff for Indonesia.
In addition, the formation of the Deregulation Task Force is a strong signal that the government is not remaining silent in the face of external pressure. This step sends a message to business actors that the state is present to provide real solutions to answer global challenges. In the short term, deregulation is expected to provide breathing space for the business world to adjust its business strategy. In the long term, consistent and measurable deregulation will form a national economic structure that is more resilient and adaptive to external turmoil.
Minister of Trade, Budi Santoso said that the Deregulation Task Force will later work to evaluate and simplify various technical regulations that have so far made it difficult for business actors. The formation of this task force shows the government’s seriousness in responding to global challenges, while also answering the demands of the international market. In the context of trade relations with the US, deregulation is seen as important so that Indonesian products are more competitive.
Budi said that the concept of the Task Force’s work will later be discussed together with related ministries and institutions (K/L). Once formed, this team will review regulations that have the potential to be simplified or removed in order to support a healthier trade climate. This response also shows that the government understands the importance of collaboration between the public and private sectors. The Deregulation Task Force is not only an internal government forum, but also a meeting point for dialogue between policy makers and business actors.
The deregulation steps taken also do not mean weakening the state’s control and supervision functions. In fact, by simplifying overlapping and excessive regulations, the effectiveness of supervision can be increased. Excessive and disharmonious regulations often create gaps for legal uncertainty, and in some cases, become a source of corruption. Therefore, deregulation designed with the principle of good governance will strengthen the state’s position as a facilitator of development, not as an obstacle.
In the framework of foreign policy, this step can also be read as a form of strategic adjustment to global economic geopolitics. Indonesia is not only reactive to US policies, but is also proactive in strengthening its economic structure from within.
The impact of import tariffsor AS cannot be completely avoided, but through the right deregulation policy, the pressure can be minimized. For example, if the export licensing process can be cut from previously taking weeks to just a few days, then this efficiency will increase the speed of industry response to foreign market demand. This provides added value amidst the uncertainty of international trade.
On the other hand, public participation is also a key factor in driving the effectiveness of deregulation. The community, academics, and business actors must be involved in the consultation process and policy supervision. Mass media and digital platforms can be utilized to create a constructive dialogue space and to ensure that the deregulation process is carried out transparently. That way, public trust in the government will increase, which ultimately strengthens the legitimacy of the deregulation policy itself.
)* The author is the editorial team of the Student Press Institute (LPM) Ideas
