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US seeks to maintain presence through trade in Indo-Pacific: Senator
The US has tended to lean more on its military relationship with countries in the region, but sees economic ties as just important, including the bilateral trade with Indonesia.
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United States Senator Tammy Duckworth speaks to reporters at the US Embassy in Jakarta on Aug. 10, 2023. Senator Duckworth was in Jakarta to attend the 44th General Assembly of the ASEAN Inter Parliamentary Assembly (AIPA). (JP/A. Muh. Ibnu Aqil)
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he United States is seeking to maintain its presence in the Indo-Pacific region by increasing its trade relations, in addition to its military ties, in a seeming move to counter China’s influence in the region, a visiting senator has said.
The US has tended to lean more on its military relationship with countries in the region. But economic ties are just as important, including trade with Indonesia, which has been “underperforming” but can be improved, US Senator Tammy Duckworth said on Thursday.
“[The] economic relationship is just as important for American national security as the military relationship,” she said in a press briefing in Jakarta.
Duckworth was visiting Jakarta to attend the 44th General Assembly of the ASEAN Inter-Parliamentary Assembly (AIPA), which ran from Monday to Wednesday. She also met with representatives of participating AIPA countries and businesses.
One aspect of trade that can be improved is the electric vehicle (EV) battery industry. Indonesia is keen on developing the industry thanks to its abundant sources of nickel, while the US plans to invest more into it since Congress passed the Inflation Reduction Act (IRA) in August last year.
The act includes a US$7,500 consumer tax credit for EVs. To be eligible for the credit, the battery of the purchased EV needs to be built using minerals extracted or processed in a country that has a free trade agreement (FTA) with the US. A certain percentage of the components must also be manufactured or assembled in North America and must not come from a “foreign entity of concern”, which many interpret as referring to China.
Read also: Indonesia warns of ‘open conflict’ in Indo-Pacific
