RI Tempuh Negotiations To Face US Resipprocal Tariff Policy

JAKARTA - The Indonesian government has decided to take negotiation efforts in dealing with the reciprocal tariff policy of the United States (US).

Coordinating Minister for Economic Affairs Airlangga Hartarto said, instead of applying the reply rate, the Indonesian government chose to use a diplomatic strategy in finding mutually beneficial solutions for the two countries.

"We are subject to a very short time, namely April 9, we are asked to respond. Indonesia is preparing an action plan by paying attention to several things, including imports and investments from the United States," Airlangga said at a Limited Advanced Coordination Meeting related to the United States Reciprocal Tariff Policy which was held virtually as reported by ANTARA, Sunday, April 6.

This approach is taken by taking into account the long-term interests of bilateral trade relations, as well as to maintain the investment climate and stability of the national economy.

On the other hand, the Government is also observing the potential impact of tariff policies on a number of labor-intensive, export-oriented industrial sectors, such as the market and footwear industry.

These sectors are considered vulnerable to global market fluctuations, so the Government is committed to continuing to provide support through various targeted incentives to maintain competitiveness and business continuity.

The United States' own reciprocal rate will take effect from April 9, 2025.

There are several products that are excluded from the reciprocal tariff, including 50 USC 1702(b) protected goods, such as medical and humanitarian goods, products that have been charged tariffs based on Section 232 namely steel, aluminum, cars and car parts, strategic products namely copper, semiconductor, wood products, pharmaceuticals, bullion (global metal), and certain energy and minerals that are not available in the US.

The government will also continue to coordinate with relevant stakeholders, including business associations to ensure that domestic industrial votes are also part of the policy strategy formulation process.

Studies and calculations continue to be carried out in depth on the fiscal implications of various policy steps under consideration.

The evaluation is carried out to ensure that every policy taken remains in line with the principles of fiscal prudence and maintains the stability of the State Budget in the medium and long term.

"Because this is still dynamic and still needs a working group to continue working, the President asked us to write a letter before April 9, 2025. But technically, the team continues to work to carry out the deregulation umbrella so that this responds and follows up from the last Cabinet Session in March," said Coordinating Minister Airlangga.

The government will also invite business actors associations in socialization forums and input screening related to tariff policies imposed by the US Government.

The activity is scheduled to take place on Monday (7/04) as part of an effort to formulate responsive and inclusive strategic steps.

"Tomorrow the entire industry will be invited to get input related to their exports and also related to things we need to maintain, especially the labor-intensive sector," said Airlangga.

Not only responding to the new US tariff policy, he continued, the Government is also preparing strategic steps to welcome the opening of the European market which is also important because it is the second largest market after China and the US.

"We can also encourage this, so that we have a bigger market alternative," said Airlangga.

Also attending the coordination meeting were Bank Indonesia Governor Perry Warjiyo, Finance Minister Sri Mulyani, Minister of Investment and Downstreaming/Head of BKPM Rosan Perkasa Roeslani, Minister of Trade Budi Santoso, and Chairman of the Board of Commissioners of the Financial Services Authority Mahendra Siregar, as well as a number of Deputy Ministers and representatives of Ministries/Institutions (K/L).