Jakarta. The government revealed Friday it had come up with a strategy to help Indonesian small businesses survive after agreeing to let US goods enter its market tariff-free, among others, by facilitating their licensing needs.

President Prabowo Subianto and his American counterpart, Donald Trump, recently reached a trade agreement that greatly slashes the US tariffs on Indonesian goods to 19 percent. Trump had pulled back on the 32 percent duty he had previously threatened to impose on Indonesia. In exchange for the tariff cut, Indonesia promised to eliminate tariffs and non-tariff barriers for the US, while also pledging to buy $4.5 billion worth of farm products, among others. Analysts have warned that the deal was far from being a win-win. 

Maman Abdurrahman, the minister for micro, small, and medium enterprises (MSMEs), said that work was already underway to ensure local businesses remain competitive amid the potential influx of American goods. This includes helping MSMEs secure business identification numbers (NIBs), distribution permits, and halal certificates -- all are key documents to make sure they remain competitive, according to Maman. NIBs are also crucial for businesses to access loans.

“We have seen a surge in the permits issued [for our MSMEs]. This will enhance their market competitiveness as we support their legality. … And we are bringing them closer to financing, … not just the state-owned banks, but also venture capitals, private banks, and fintech companies,” Maman told reporters in Jakarta.

Another strategy is to open up MSMEs’ market access, both at home and abroad. 

“Market access is not only about export here. Our domestic market is pretty significant. Imagine if we are only encouraging MSMEs to export without helping them establish a stronger presence in the domestic market. It will only lead to the entry of imported goods,” Maman said.

"We will also continue to evaluate our MSME policies that involve other institutions, including marketplaces.”

Data showed that Indonesia’s permit rollout was in full swing after Trump first announced the tariff back in April. In the second quarter of 2025, almost 1.4 million new micro-sized businesses got their NIBs. The same goes for 35,539 small-sized businesses and the other 3,198 medium-scale enterprises.  

Trump has imposed a 10 percent baseline tariff on all US trading partners, which would increase accordingly based on the deals. He had given countries until August 1 to negotiate. To date, Trump’s 19 percent reciprocal tariff on Indonesia is among the lowest in Southeast Asia, just second to Singapore’s 10 percent. Despite experts’ concerns, Prabowo claimed that the government had already made the necessary calculations before striking the deal with Trump. Prabowo, however, admitted that he would be most happy with a 0 percent tariff.

"We have done all the calculations. We have also negotiated everything. What's most important to us is our people. We have to protect our workers,” Prabowo told the press earlier this week.

Trump’s latest tariff move is part of his strategy to fix his country’s trade imbalance with Indonesia. The US reported that its goods imports from Indonesia amounted to $28.1 billion in 2024, up 4.8 percent year-on-year. Washington saw a $17.9 billion goods trade deficit with Jakarta last year.

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