Jakarta. Indonesia’s Chamber of Commerce and Industry (Kadin) has welcomed the United States’ decision to reduce import tariffs on Indonesian products from a planned 32 percent to 19 percent, calling it an opportunity to boost national exports.

The tariff reduction, announced by President Donald Trump, places Indonesia in a stronger position than many other countries facing higher rates. Kadin Chairman Anindya Bakrie praised the government’s efforts in securing the deal, especially as Indonesia maintains a trade surplus with the US.

“Congratulations to the government. This agreement is good for Indonesia,” Anindya said on Wednesday.

While some have questioned why the tariff could not have been lowered further, Anindya emphasized that the 19 percent rate is still favorable compared to countries like Mexico and China, which face tariffs of 35 percent and 30 percent, respectively. He added that although the UK enjoys a lower tariff of 10 percent, it runs a trade deficit with the US, unlike Indonesia, which recorded an $18 billion surplus.

“Many are asking, why 19 percent and not lower? But given Indonesia’s surplus with the US, it is expected there would be tariffs,” Anindya said.

The tariff reduction is part of a trade agreement announced by US President Donald Trump on Tuesday, under which the US will cut tariffs on Indonesian goods in exchange for Indonesia providing tariff-free access for American products. Trump stated on his Truth Social platform that Indonesia has committed to purchasing $15 billion worth of American energy products, $4.5 billion in agricultural goods, and 50 Boeing aircraft, including Boeing 777 wide-body jets, although he did not specify the timeline for these purchases.

Kadin believes the agreement could significantly increase bilateral trade, with Anindya projecting that Indonesian exports to the US could double within five years.

“Trade, which currently sits at $40 billion, could reach $80 billion in five years. We need to look at what’s in it for us, not just them,” he said.

To seize this opportunity, Kadin plans to hold discussions with domestic industry players, including those in textiles, garments, footwear, and electronics, to ensure production capacity can meet potential demand increases.

“We cannot let this opportunity slip away or allow other countries with higher costs to benefit just because we are unprepared,” Anindya said.

Meanwhile, the Indonesian Employers Association (Apindo) has urged the government to remain cautious despite the positive momentum from the US tariff cut and the anticipated signing of the Indonesia-European Union Comprehensive Economic Partnership Agreement (IEU-CEPA) in the third quarter of 2025.

Ajib Hamdani, Apindo’s economic policy analyst, said the lower tariffs and market diversification in the EU could benefit labor-intensive industries but warned of potential challenges that require careful mitigation to protect domestic industries.

He outlined three areas needing attention: safeguarding the domestic market through anti-dumping measures, continuing structural and cost reforms to improve business competitiveness, and strengthening domestic supply chains to reduce import dependence.

“The government must encourage import substitution and bolster upstream sectors, including metals, chemicals, and agriculture,” Ajib said.

Apindo has identified four key sectors set to benefit from the tariff cut: textiles and textile products, footwear and furniture, children’s toys and household goods, and food, leather, and handicraft products, all of which have high exposure to the US market.

He also highlighted that trade negotiations with the US and the EU are not solely economic but carry geopolitical significance requiring cautious diplomatic engagement.

“Negotiations should prioritize stability, adaptability, and competitiveness to sustain the economy amid rising global protectionism and uncertainty,” he said.