Indonesia’s senior economic minister, Airlangga Hartarto, highlighted the country’s commitment to its national interests during ongoing tariff negotiations with the United States.

During an online press conference, Hartarto said that Indonesia seeks a fair trade relationship with the US.

The discussions have included energy supply, market access for Indonesian products, deregulation, and cooperation in sectors such as agriculture, healthcare, and renewable energy.

Indonesia has proposed increasing imports from the US by up to US$19 billion.

This includes goods such as wheat, soybean, liquefied petroleum gas, and crude oil.

🔗 Source: Reuters

🧠 Food for thought

1️⃣ Indonesia’s cooperative approach stands out among tariff-targeted nations

Indonesia’s strategic choice to negotiate rather than retaliate differentiates it from other major economies facing U.S. tariffs.

While the EU and Canada have implemented counter-tariffs and China has escalated with retaliatory measures1, Indonesia’s finance minister specifically highlighted that they hope their “swift decision to negotiate” will be rewarded.

This diplomatic approach includes a concrete proposal to increase U.S. imports by up to $19 billion through commodity shifts like wheat, soybean, and liquefied petroleum gas2.

Indonesia’s tactics appear aligned with the U.S. Treasury Secretary’s recent statement that the administration is prioritizing negotiations with the world’s 15 largest economies3.

The current $14.3 billion trade surplus ($17.9 billion according to USTR data4) gives Indonesia some leverage but also makes it a clear target under the administration’s focus on bilateral deficits.

2️⃣ Economic costs and opportunities emerge from tariff pressures

Despite Indonesia’s diplomatic efforts, the finance minister has projected that U.S. tariffs could reduce Indonesia’s economic growth by 0.3-0.5 percentage points from the government’s 5.2% target5.

This impact assessment helps contextualize why Indonesia is moving quickly to negotiate, given that a half-percentage point reduction represents approximately $5.6 billion in lost economic output based on Indonesia’s $1.13 trillion GDP.