Indonesian officials head to the US to offer incentives as part of tariff negotiations

JAKARTA - Top Indonesian economic officials will be heading to Washington next week in a signal of the country’s commitment to address the trade imbalance with the US.

Coordinating Minister for Economic Affairs Airlangga Hartarto told an investor gathering on April 8 that Indonesia will relax its Domestic Component Level policy – known as TKDN – on information and communications technology (ICT) goods, which had required Apple smartphones and tablets sold in Indonesia to have 40 per cent of their components made locally.

Indonesia, which ran a US$17.9 billion (S$24.2 billion) trade surplus with the US in 2024, is committed to balancing bilateral trade by importing more US agricultural products, among others, Mr Airlangga told the gathering in Jakarta attended by investors, analysts and fund managers.

“A number of non-tariff deregulation policies including the TKDN for the ICT that is requested by the US will be issued,” he said, while stressing that Jakarta will not take any retaliatory measures against the recently announced 32 per cent tariff that will be imposed by the US on Indonesia from April 9.

US President Donald Trump on April 2 announced sweeping tariffs – including a 10 per cent baseline tariff on all imports to the US and higher, country-specific tariffs based on existing trade imbalances.

A number of countries, including China, have decided on retaliatory measures in turn.

“Indonesia has opted to take a negotiation route, instead of retaliatory measures, with the US, because the US is a strategic partner,” said Mr Airlangga.

In Bangkok, Thai Finance Minister Pichai Chunhavajira said on April 8 that the country will increase US imports, lower some of the higher taxes on American goods and address non-tariff barriers, as it seeks to negotiate a better deal on new US tariffs, Reuters reported.

Indonesia’s main exports to the