Indonesia offers to buy US aircraft, wheat in tariff negotiations
Indonesia is facing a 32% tariff in US markets and has proposed increasing US imports to facilitate trade talks between the two sides
[JAKARTA] Indonesia has offered to cut duties on key imports from the United States to “near zero” and to buy US$500 million worth of US wheat as part of its tariff talks with Washington, its lead negotiator and a wheat industry association said on Friday (Jul 4).
Chief economics minister Airlangga Hartarto, who is Indonesia’s lead negotiator, also confirmed that state carrier Garuda Indonesia would buy more Boeing planes as part of a US$34 billion pact with US partners due to be signed next week.
Indonesia, which ran a goods trade surplus of US$17.9 billion with the US in 2024 according to the US Trade Representative, is facing a 32 per cent tariff in US markets and has proposed increasing US imports to facilitate trade talks between the two sides.
Airlangga said the Indonesian government has offered to cut tariffs on key American exports, including agricultural products, to near-zero from between 0 per cent and 5 per cent at present.
“It will be near zero (tariffs for US main exports), but it will depend as well on how much the tariffs we get from the US,” Airlangga said.
Garuda’s CEO has said it is in discussions with US Boeing to buy up to 75 units of aircraft. Garuda group did not respond to requests for comment on Friday.
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The wheat purchases are also part of next week’s pact with US partners.
The chairman of Indonesia’s wheat flour mills association, Franciscus Welirang, said its “members will purchase two million tonnes in total through tenders with a competitive price.”
“The point is all of the members will buy US wheat,” Welirang, who is also a director at Indofood, told Reuters.
The US counterparts in the wheat deal include Cargill, Bunge Global, Pacificor, Archer-Daniels-Midland, Columbia Grain International, and United Grain Corporation, Welirang added.
US exports to Indonesia include soybeans, petroleum gases and aircraft, Indonesian government data showed.
When asked whether the trade talks include military deals, Airlangga said they were “not part of the negotiation”.
Susiwijono Moegiarso, a senior official with Indonesia’s Coordinating Ministry for Economic Affairs, told Reuters that in return, Jakarta has asked the US for preferential tariffs on its main exports, including electronics, textiles and footwear.
“We want them to lower the tariffs (for those goods) as low as possible,” he said.
Indonesia has also offered the US opportunities to invest in critical minerals projects, including in the country’s abundant resources of copper, nickel and bauxite. REUTERS
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