The Indonesian government plans to send representatives to the United States next week to negotiate a 32% import tariff recently imposed by President Donald Trump.

Coordinating Minister for Economic Affairs Airlangga Hartarto and Foreign Minister Sugiono will lead the discussions, according to Febrio Kacaribu, head of Indonesia’s Fiscal Policy Agency.

The delegation is set to meet with the United States Trade Representative (USTR) and other relevant parties.

These negotiations will occur after the tariff takes effect on Apr. 9, with the team expected to depart by Apr. 17.

Hartarto said Indonesia is coordinating with ASEAN nations to align their positions before discussions with the US.

🔗 Source: Kumparan

🧠 Food for thought

1️⃣ Indonesia-US trade imbalance makes it a primary tariff target

Indonesia’s significant trade surplus with the US makes it particularly vulnerable under Trump’s tariff formula, which primarily targets countries based on their trade imbalances rather than actual trade barriers.

The US maintained a $17.9 billion trade deficit with Indonesia in 2024, which increased 5.4% from the previous year1.

This deficit appears to be the primary factor behind the 32% tariff rate imposed specifically on Indonesian goods, ultimately raising total tariffs to 37% when combined with existing duties2.

The tariff calculation methodology has been criticized for oversimplifying complex trade relationships, as it applies uniformly regardless of countries’ actual trade policies or market access barriers3.

Similar Southeast Asian manufacturing economies like Vietnam are facing even higher tariffs of 46-49%, illustrating a regional pattern of targeting countries with manufacturing export surpluses4.

2️⃣ Labor-intensive Indonesian exports most vulnerable to tariff impacts

Certain sectors of Indonesia’s economy face disproportionate risk from the new tariffs, particularly those involving labor-intensive manufacturing that has been central to Indonesia’s export growth.

Economists at Gadjah Mada University have identified textiles and footwear as especially vulnerable industries, with potential ripple effects including increased poverty rates and significant export revenue declines2.