JAKARTA – The Indonesian government under the leadership of President Prabowo Subianto continues to pursue adaptive diplomacy in responding to trade tariff pressures due to protectionist policies from the President of the United States, Donald Trump.
Intelligence observer from the State Intelligence College (STIN), Dr. Stepi Anriani, assessed that the adaptive diplomacy approach is a realistic step in preventing global economic fragmentation that is occurring.
“Indonesia needs to strengthen its domestic economic structure, attract investment, and build global trust as a middle power,” he explained.
The State Intelligence College lecturer also emphasized the importance of strengthening economic intelligence and initiating the Global South Economic Dialogue forum as a strategic solution in dealing with collective tariff wars.
Meanwhile, a delegation of ministers from the Red and White Cabinet has been sent to Washington DC to conduct intensive negotiations during the suspension of tariff impositions until June 9, 2025.
Coordinating Minister for Economic Affairs, Airlangga Hartarto, stated that Indonesia was one of the first countries to receive an invitation to negotiate in Washington.
“Indonesia is one of the countries that got the first opportunity to be invited to Washington,” he said.
The negotiation team consisted of six high-ranking officials, including Foreign Minister Sugiono, Finance Minister Sri Mulyani, and Deputy Foreign Minister Arrmanatha Nasir.
The delegates held negotiations with the USTR, Department of Treasury, and Department of Commerce, discussing non-paper proposals that included tariff relaxation, NTMs, investment cooperation, and strengthening the financial sector.
The Deputy Minister of Investment and Downstream, Todotua Pasaribu, emphasized that the relaxation of the Domestic Component Level (TKDN) policy only applies to products from the US technology sector.
“The relaxation of the obligation to fulfill TKDN is limited to goods from the US, it does not apply generally,” he said.
The negotiations also included a reduction in VAT and import income tax. Coordinating Minister Airlangga highlighted that the main issue for the US was not just tariffs, but also non-tariff barriers.
“Their issues are mostly on non-tariff barriers and import VAT,” he said.
For information, Indonesia plans to increase imports from the US by US$18-19 billion, especially in agricultural products, technology, and energy.
This step is intended to balance the trade balance.
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