Indonesia is among the countries that have successfully concluded a new agreement on import tariffs with the United States. Following constructive negotiations, a mutually agreed reduction in reciprocal tariffs on Indonesian imports to 19% from the initial 32% has been reached. This reduction in import tariffs is accompanied by the elimination of tariffs and non-tariff barriers for U.S. exports to Indonesia. Furthermore, Indonesia has committed to purchasing U.S. products, including energy worth USD 15 billion, agricultural products worth USD 4.5 billion, and 50 Boeing aircraft, mostly of the 777 type. The Indonesian Minister of Agriculture, Amran Sulaiman, has announced that his country will be importing agricultural products from the United States, particularly wheat. Amran clarified that this import does not conflict with the domestic food security programme.
Executive Director of the Centre for Economic and Law Studies (Celios), Bhima Yudhistira, has assessed that the agreement on import tariffs will have a significant impact on a number of key sectors, including oil and gas, electronics, aircraft parts, cereals, and pharmaceuticals. Furthermore, Bhima explained that the imposition of a 19% tariff on Indonesian exports to the US, while US products receive a 0% tariff, could pose a significant risk to Indonesia's trade balance. Furthermore, the government's proposed energy subsidy allocation for 2026, amounting to IDR 203.4 trillion, will not be sufficient to meet the country's oil and gas import needs. Based on his calculations, the required investment amount is between IDR 300-320 trillion, given Indonesia's increasing reliance on petroleum products and liquefied petroleum gas imports. The state's reliance on oil and gas imports has proven to be a significant financial burden, impacting the state budget. There are concerns that Indonesia may be obliged to purchase oil from the US at prices above market rates as a result of trade agreements. Consequently, if Indonesia is compelled to purchase oil and LPG from the US at prices higher than those typically procured by Pertamina, it will face significant challenges.
