Trump’s 19% Import Tariffs Boost Indonesia’s Investment Attraction
Jakarta – The Indonesian government has welcomed the announcement of the latest import tariffs from the United States on Indonesian products. US President Donald Trump set the new tariff at 19%, a significant decrease from the previous 32%.
This tariff is lower than those imposed on neighboring countries such as Vietnam (20%) and the Philippines (20%), and even far below those imposed on Malaysia (25%) and Thailand (36%). Meanwhile, the US will remain tariff-free in exporting its products to Indonesia, in accordance with the latest bilateral trade agreement.
Indonesian President Prabowo Subianto viewed this agreement as a new milestone in trade relations between the two countries. In his statement, Prabowo stated that he and President Trump agreed to enter a new era of mutually beneficial trade relations.
“We agreed to bring trade relations between Indonesia and the United States into a new era that is mutually beneficial for both of our great nations,” he emphasized.
Fakhrul Fulvian, Chief Economist at Trimegah Sekuritas Indonesia, viewed this decision as a strategic deal that greatly benefits Indonesia. He highlighted the lower tariff differential compared to neighboring countries as a golden opportunity to attract new investment into Indonesia.
“With lower tariffs, there should be potential investment inflows of US$200–300 million into Indonesia in the next one to two years. This provides momentum to encourage the development of industrial estates,” said Fakhrul.
Fakhrul emphasized that this agreement also includes Indonesia’s planned purchase of 50 Boeing aircraft, as well as agricultural and energy products from the US. Equally important, Indonesia’s strategic role in rare earth minerals, copper, and other critical natural resources is also recognized in the agreement.
“Our position in rare earth minerals, copper, and other minerals shows Indonesia’s bargaining position. These resources will ultimately become our bargaining power in the future. More important than tariffs is the recognition of Indonesia’s bargaining position in the global supply chain,” he said.
Support for the government’s move also came from parliament. Puteri Komarudin, a member of Commission XI of the Indonesian House of Representatives, appreciated President Prabowo’s negotiating approach. Indonesia still has room to expand mutually beneficial cooperation with the US, especially following the signing of several memorandums of understanding between Indonesian companies and American business partners in the energy and agriculture sectors.
“Our government has gone all-out. This step helps close the trade deficit that has been a focus of President Trump’s attention,” he explained.
With this strategic agreement, Indonesia is now in a more competitive position amidst the dynamics of the global economy. The government is expected to capitalize on this momentum to strengthen Indonesia’s position as an industrial and investment hub in Southeast Asia.
