17-07-2025
Indonesia to Continue Talks on Jets, Minerals After Tariffs Deal
(Bloomberg) -- Indonesia will keep talking with the US on sectoral tariffs, jet purchases and critical minerals after securing a 19% baseline tariff rate on exports to the world's largest economy, a government adviser said Thursday.
Jakarta will 'continue to negotiate with good intention,' Mari Elka Pangestu, an adviser to President Prabowo Subianto on international trade and multilateral cooperation, said in an interview with Haslinda Amin on Bloomberg TV. That includes enhancing business interactions, helping diversify America's critical mineral- supply chain and negotiating sector-specific tariffs on products including aluminum and steel, she said.
Several key business agreements linked to tariff discussions, such as PT Garuda Indonesia's plans to purchase dozens of Boeing Co. jets, also require commercial signoffs, Pangestu noted. The state-owned airline, which has been seeking to turn around its finances after sinking into the red last year, has said it could buy 50 or more jets, but a formal deal has yet to be announced.
'These are all commercial deals that will, of course, have to be done on competitive and business-to-business terms,' she said. 'There are things being done, being undertaken, to improve Garuda's performance and ability, obviously, to purchase these Boeing jets.'
The purchase is part of an ongoing process to revitalize Indonesia's flag-carrier, Pangestu said.
The tariffs deal, struck earlier this week between President Donald Trump and Prabowo, erases duties on US imports to Indonesia, and includes plans by the Southeast Asian nation to buy more than $19 billion of American energy and agricultural products.
The agreement was among the first announced globally as the US carries out negotiations with dozens of countries. That highlights both Indonesia's ongoing effort to strategically balance economic ties between the US and China, and Southeast Asia's role as a crucial pivot in global trade dynamics amid rising geopolitical tensions.
Pangestu, also a member of Indonesia's National Economic Council (DEN), said the country will grant the US increased access for exports not competing directly with Indonesian products or those in short supply locally, such as wheat and cotton. Officials expect only a modest impact on imports overall.
'It's not about opening up totally and giving in everything to the US,' she said. 'It is more nuanced and balanced than what maybe appears to the outsider.'
The deal benefits Indonesia by securing lower tariffs compared to competitors on key exports to US like palm oil, she said.
'But of course we will continue to be talking to the US,' she added. 'There are other components to a trade deal that we would of course like to have more benefit coming to us.'
--With assistance from Anand Menon.
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