New US tariff, exemptions will provide growth stimulus for Indonesia, minister says

[JAKARTA] Indonesia’s chief economic minister said on Friday (Jun 5) that an additional 10 per cent duty imposed by the United States on the country’s exports, along with the exemptions expected for some of its key products, could help to stimulate economic growth.

The US Trade Representative (USTR) has proposed tariffs of up to 12.5 per cent on imports from 60 countries after determining they had failed to curb trade in goods made with forced labour, Washington announced earlier this week. It proposed a 10 per cent rate for Indonesia, lower than some of its competitors.

The statement from Chief Economic Affairs Minister Airlangga Hartarto came after his meeting with USTR Ambassador Jamieson Greer on the sidelines of OECD meetings in Paris.

Airlangga said that Indonesia’s request for 18 product exclusions under the Section 301 investigation was likely to be granted, without providing details.

“These strategic measures will certainly serve as a huge economic stimulus for Indonesia’s industry, reduce export costs, and increase the competitiveness of our key commodities in US domestic markets,” Airlangga said.

He expects copper cathode exports from Freeport Indonesia, a mining company controlled by US miner Freeport McMoran but whose majority shareholder is the Indonesian government, to be exempted from the US tariff Section 232.

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The USTR’s announcement came ahead of the Jul 24 expiration of a 10 per cent temporary tariff imposed by US President Donald Trump’s administration on Feb 20, the day the Supreme Court struck down Trump’s tariffs under the International Emergency Economic Powers Act.

The United States and Indonesia signed an agreement on reciprocal tariff ahead of the court ruling on Feb 20, but both countries have not ratified the deal. REUTERS