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Growing pains: US tariff policy overshadows planned Jokowi visit
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President Joko "Jokowi" Widodo (right) speaks with Coordinating Economic Minister Airlangga Hartarto before leading a limited cabinet meeting to prepare for Indonesia's participation in the Hannover Messe 2020 in Germany and World Expo Dubai 2020 in the United Arab Emirates, at the presidential compound in Jakarta, on February 17, 2020. (Antara/Hafidz Mubarak)
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recent United States decision to revoke Indonesia’s status as a developing country may have a dampening effect on the country’s trade interests, experts have said, as officials scramble to arrange a visit by President Joko “Jokowi” Widodo to the US next month.
Few details of the plan for the President to meet US President Donald Trump have emerged, but the meeting has been backed by Jokowi’s senior aide, Coordinating Maritime and Investment Minister Luhut Pandjaitan, who recently returned from the US with the promise of US investment.
Multiple meetings have been held between Indonesian and US officials in what some observers see as an apparent prelude to a visit by Jokowi. Others see it as a reaction to the removal of Indonesia’s “developing country” status at the World Trade Organization.
Luhut’s visit to Washington on Feb. 13 came just days after the US Trade Representative (USTR) office announced its decision to scrap Indonesia from its list of developing countries, which industry players and economists warned could put the country at a greater risk of being accused of excessively subsidizing trade with the US.
The Trade Ministry previously said that the new policy would lower the de minimis threshold to 1 percent – a percentage usually given to developed countries – as opposed to the 2 percent threshold in the previous policy. The threshold refers to the value of imported goods below which no duty or tax is collected.
Indonesian Chamber of Commerce and Industry (Kadin) vice chair for international relations Shinta Widjaja Kamdani said on Monday that the lower minimum threshold resulting from the US decision would make it difficult for Indonesia to defend itself at the WTO.
“So when Indonesia gains a larger US market share and dominates with certain products in the future or when the US receives complaints from its local industry players, the US will directly assume that there needs to be a countervailing duty or antidumping investigation on those imported products,” Shinta told The Jakarta Post.
