Indonesia Aiming To Finalize Tariff Deal With US In January – CoffeeTalk

Indonesia and the U.S. have successfully resolved all substantial issues related to a tariff agreement, with plans for the signing of the deal by President Prabowo Subianto and President Donald Trump at the end of January, as reported by Indonesia’s chief negotiator, Senior Economic Minister Airlangga Hartarto. In discussions held in Washington with U.S. Trade Representative Jamieson Greer, it was highlighted that the U.S. seeks access to Indonesia’s critical minerals while providing tariff exemptions for Indonesian palm oil, tea, and coffee, reinforcing Indonesia’s position as the largest exporter of palm oil and a key supplier of robusta coffee globally.

Despite earlier tensions regarding the potential collapse of negotiations, which arose when the U.S. accused Indonesia of not adhering to previous commitments, Hartarto downplayed such assertions, indicating that the differences were merely about “harmonising the language” of commitments. Emphasizing the positive trajectory of the most recent talks, Hartarto affirmed that all significant issues had been resolved, ensuring a mutually beneficial agreement that facilitates balanced market access for both American and Indonesian products.

The Indonesian side is working on scheduling a meeting between Prabowo and Trump within the designated timeline for signing the trade agreement. Hartarto clarified that this agreement does not impose restrictions on Indonesia’s ability to engage in trade deals with other nations, framing the accord as commercial and strategic, aimed at bolstering economic interests for both entities.

Moreover, a reference was made to clauses in existing U.S. trade agreements with Malaysia and Cambodia, which allow for the termination of such deals under certain conditions. The new agreement is expected to extend beyond tariffs, incorporating collaborative efforts in digital trade, technology, and national security, although detailed specifics remain undisclosed.

The context of the negotiation includes a backdrop where President Trump had implemented a 19% tariff on Indonesia following a preliminary agreement from July, which was a reduction from an initially threatened 32%. This reduction was contingent on Indonesia making commitments to eliminate trade barriers for American exports and increasing the purchase of U.S. goods. Hartarto assured that the likelihood of the U.S. reinstating the higher tariff remains low as the draft agreement has been largely accepted by both parties.

During the period from January to October, trade between Indonesia and the U.S. reached a total value of $36.2 billion, with Indonesia holding a notable surplus of $14.9 billion, signifying the importance of the U.S. as Indonesia’s second largest export market.

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