Trade pact: Jakarta's $34 billion play to secure tariff deal with US
Indonesia plans to invest in the US and purchase American agricultural goods and $15.5 billion of energy products under a memorandum of understanding to be signed on July 7, Coordinating Economic Minister Airlangga Hartarto told reporters in Jakarta on Thursday.
While the MoU is part of Indonesia's negotiations to secure lower US tariffs, it doesn't represent a final agreement, Hartarto said. "We have to see later the final announcement by our US counterparts," he added when asked about a tariff rate deal.
The planned MoU involves Danantara, a new sovereign wealth fund under President Prabowo Subianto that manages Indonesia's state-owned enterprises, and private entities including flag-carrier Garuda Indonesia, instant noodle maker Indofood CBP Sukses Makmur and a local feed mills association, he said. Hartarto, who is leading Indonesia's efforts to reduce Washington's planned 32% tariffs on Indonesian imports, said Southeast Asia's largest economy aims to secure more favorable terms than neighboring Vietnam. Hanoi, which had a $123.5 billion trade surplus with the US last year, struck a deal late Wednesday for a tariff rate of 20%, down from a proposed 46%.
Southeast Asian nations, among the hardest hit by US President Donald Trump's planned tariffs, have been racing to seal trade deals with Washington before the July 9 cutoff to avoid increased rates.Indonesia has already eased or eliminated some import restrictions as part of a bid to shrink its $18 billion trade surplus with the US. Jakarta has also pledged to remove non-tariff barriers and boost imports of US products, potentially including oil, liquefied petroleum gas and soybeans.Hartarto also said the US has no concerns about transshipment involving Indonesia and hadn't broached the topic in trade discussions, unlike in Vietnam.
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