In a strategic move to mitigate the repercussions of impending U.S. tariffs, Indonesia announced a range of concessions on American imports on Tuesday, including tax cuts on electronic goods and steel.
This comes as Southeast Asia’s largest economy prepares for trade negotiations in Washington aimed at softening the blow of a 32% tariff set to be implemented on Wednesday.
Indonesia will dispatch a high-level delegation led by chief economic minister Airlangga Hartarto to the United States next week to negotiate a favorable deal. Key elements of the negotiation include Indonesia’s plans to purchase U.S.-sourced liquefied petroleum gas, liquefied natural gas, and soybeans.
The announcement was made during a gathering that included President Prabowo Subianto, top governmental, financial leaders, alongside the business community, as they addressed strategies for dealing with U.S. tariff policies.
Among the concessions, Finance Minister Sri Mulyani Indrawati revealed that Indonesia would reduce import taxes on U.S. steel, mining products, and healthcare equipment to between 0% and 5%, down from the current range of 5% to 10%.
Furthermore, import taxes on electronics, mobile phones, and laptops from all countries are set to decrease to 0.5% from 2.5%.
Indrawati suggested that Indonesia might replace countries like Vietnam, Bangladesh, Thailand, and China as a prominent source for certain U.S. exports in light of the new tariffs under the Trump administration.
According to government data, Indonesia registered a $16.8 billion trade surplus with the U.S. last year, with the United States being its third-largest export destination—receiving goods worth $26.3 billion in 2024. Major Indonesian exports to the U.S. include electronics, apparel, clothing, and footwear.
Additionally, discussions are underway to increase imports from the U.S., including acquiring components for an oil refinery project and evaluating potential relaxations in local content requirements for American technology and communication firms.
