Jakarta. A senior minister recently claimed that other countries actually did not mind Indonesia rolling out the red carpet for American firms as part of their tariff negotiations, citing that existing trade accords already promise similar facilities.

Indonesia’s tariff talks with the US have entered the final stage, with Jakarta eyeing to sign the deal within this year. According to a framework agreement unveiled in July, US President Donald Trump decided to lower the tariff on Indonesian goods from the initially threatened 32 percent to 19 percent, with conditions. Indonesia will scrap the tariffs on nearly all US-origin food and agricultural goods, on top of import commitments totaling $22.7 billion. 

Most recently, the government revealed that the state-run oil company Pertamina would give special treatment to US energy imports. American businesses are free from the exhaustive bidding process, although this new arrangement has to wait for a presidential decree.

During a press briefing, Chief Economic Affairs Minister Airlangga Hartarto responded to questions about whether the special treatment for the US could spark jealousy in Jakarta’s trading partners.

“They [other countries] are not protesting. Well, we do admit that if we give certain facilities to one country, others will want a similar treatment too. But that’s normal,” Airlangga said in Jakarta on Monday.

“We already have comprehensive economic partnership agreements [CEPAs] with Canada, the European Union, and even China, anyway,” Airlangga stated, citing that these accords can also help ease existing trade barriers. 

In September, Indonesia became the first ASEAN nation to strike a CEPA deal with Canada. Once in effect, Canadian businesses can enjoy a trade liberalization of up to 85.8 percent of the tariffs when exporting to Southeast Asia’s biggest economy. 

Indonesia is bound to remove import duties on 98.5 percent of its tariff lines for European goods in the upcoming pact with the EU. The bloc estimated that European exporters could save over €600 million ($695.8 million) in customs duties.

Just recently, ASEAN -- of which Indonesia is a part -- upgraded its trade agreement with China to include chapters on digital and green economy. Both Indonesia and China are members of the world’s largest trade pact, the Regional Comprehensive Economic Partnership (RCEP), which includes similar major tariff eliminations.

Earlier that day, Airlangga admitted to American business representatives that “there was nothing more difficult than Covid-19 and the US tariffs”. If Trump decided to keep the tariffs on Jakarta unchanged at 32 percent, Airlangga revealed that this could put as many as 5 million Indonesians out of work.

Trump has argued that his tariff assault against nearly all parts of the world was meant to improve the trade balance. The US reported a $17.9 billion deficit with Indonesia in 2024. 

John Goyer, the vice president for Southeast Asia at the US Chamber of Commerce, said that American businesses had been seeking a “transparent and non-discriminatory” trade environment with a “high degree of certainty”.

“The [July] framework agreement talks about non-tariff barriers, mutual recognition of standards, and greater market access. … If we can ultimately reach an agreement that achieves those goals, the result will be higher levels of trade and investment,” Goyer told the same conference.

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