AKARTA — President Prabowo Subianto believes that the 19 percent import tariff agreement reached with US President Donald Trump has brought various benefits to Indonesia.
Through his Instagram account @prabowo, President Prabowo said that the agreement was the best step in efforts to improve trade relations between the two countries.
“I just had a very good conversation with President Donald Trump,” the Head of State said.
“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,” Prabowo wrote.
Trade Minister Budi Santoso explained that imposing a reciprocal tariff of only 19 percent on Indonesian exports provides at least two important benefits.
“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 Indonesia’s export opportunities to the United States are now increasingly large.
“The opportunity to export to America is actually even greater now, so we’re making the most of it,” he added.
Furthermore, Minister Budi also revealed that the 19 percent tariff was the lowest among other ASEAN countries.
According to him, this policy is expected to remain in place until the implementation schedule in August.
Budi said the low tariffs could attract foreign investment into Indonesia.
“If we have advantages, it means we can attract foreign investment. Foreign investment comes to Indonesia to export to America,” he said.
Ronny P Sasmita, a senior analyst at the Indonesia Strategic and Economic Action Institution, believes that a 19 percent tariff policy for Indonesia and 0 percent for the US is fair within a geopolitical framework.
“Even though the term is reciprocal theory, reciprocity doesn’t necessarily mean that if you wear one, I also wear one,” he said.
Ronny emphasized that imports of energy, agricultural, and aircraft products from the US are necessities for Indonesia that cannot be produced domestically.
“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.
He believes this will benefit both Indonesian companies and consumers. (*)
