Jakarta. Indonesia recently told the US that it had made economic reforms as tariff talks began, starting with a meeting with the two countries’ chief diplomats.

All Indonesian goods entering the US market will face a tariff of 32 percent starting on July 9. These tariffs are part of US President Donald Trump’s latest move to improve his country’s trade imbalance. Indonesia is sending its high-ranking government officials to Washington DC to lobby over the tariffs as Jakarta fears the economic impact of losing its major export destination. 

Foreign Affairs Minister Sugiono already landed in Washington DC and had visited US Secretary of State Marco Rubio’s office on Wednesday local time. A ministerial statement wrote that Sugiono had told his American counterpart that Indonesia wants to build stronger economic cooperation with the US, particularly on the supply chain. The resource-rich country is also open to American investors who wish to invest in its nickel processing industries, among others.

“The Indonesian government has made deregulations to make [foreign investment] easier. We also wish to create a conducive [investment] climate for the foreign investors,” Sugiono told Rubio.

Rubio’s spokesperson Tammy Bruce admitted that there were indeed some discussions on the US reciprocal tariffs.

“Secretary [Rubio] welcomed Indonesia’s efforts to introduce economic reforms toward a fair and balanced trade relationship,” Bruce said.

Both governments did not go into more detail on what economic reforms Indonesia had offered at the negotiation table. Prior to the US trip, the Indonesian government dropped some hints about what sort of offers they would make to Washington. Indonesia is mulling buying more American goods to help narrow the bilateral trade gap. To sweeten the deal, it is considering lifting the import quota on certain commodities. 

President Prabowo Subianto previously also floated a plan to make the local content requirement “more realistic”. Indonesia mandates companies to source a portion of their product’s components domestically by law before they can place their goods in the market. This same regulation is what caused American tech giant Apple to take so long before they could finally sell their iPhone 16 in Indonesia. The White House admitted that the local content requirement was a factor that prompted Trump to slap a 32 percent levy on Indonesian goods. Prabowo’s senior economic advisor Mari Elka Pangestu later clarified that the government’s intention was not to entirely wipe out this policy. 

 “But it is to improve the way they are being implemented, and definitely take into account what investments that had already come in and responded to the local content requirement,” Mari told a recent conference on the Trump 2.0 administration.

However, the Indonesian government had remained tight-lipped to date on how big of a tariff cut they were aiming for in the US negotiations.

Official government figures showed that Indonesia-US trade totaled nearly $38.3 billion in 2024. However, Indonesia is making more money in the trade. Its exports totaled $26.3 billion that year, more than double its imports from the US which amounted to almost $12 billion. Indonesia recorded $3.7 billion in foreign direct investment from the US last year.

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