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Jakarta still pursuing FTA with US under Trump
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French President Emmanuel Macron's wife Brigitte Macron (left) talks with United States president-elect Donald Trump (center) as they sit alongside Macron (right) inside Notre-Dame Cathedral ahead of a ceremony to mark the reopening of the landmark church in central Paris on Dec. 7, 2024. (AFP/Ludovic Marin)
T
he government has said it will be pursuing a bilateral trade agreement with the United States during Donald Trump’s presidency, but whether that succeeds will depend on what Indonesia can bring to the discussion table.
Many expect Trump to prioritize inward-looking economic policies, which in trade could materialize in a quid pro quo approach.
The experience of Trump’s first term as president suggests he will frown upon trade partners that ship more goods onto US soil than they import. Washington may try to level out the trade balance, if not tilt it in US favor, by imposing steeper import tariffs.
Coordinating Economic Minister Airlangga Hartarto told reporters in Jakarta on Jan. 13 that Indonesia was “rather immune” to such a policy from the US, given that many of the archipelago’s products shipped to the US, such as “shoes and apparel”, had long been subject to tariffs.
However, Airlangga said Indonesia would strive for a bilateral economic agreement with the US to lower tariffs, and a free trade agreement (FTA) was among the options for what it might seek to secure with Trump.
Trade Minister Budi Santoso also told reporters in Jakarta on Wednesday that the government would “try to reapproach” the US for a bilateral agreement.
Asked whether Indonesia should be worried about a possible decline in exports to the US under Trump, Budi said there was no cause for concern, since the trade relationship between the two countries had barely changed during Trump’s first term in office from 2017 to 2021.
