Jayanty Nada Shofa, Jakarta – The Indonesian Chamber of Commerce (Kadin) views the newly struck tariff deal in a positive light, saying that the agreement will not only make trade more balanced but also double it to $80 billion in five years' time.
US President Donald Trump recently pulled back on the 32 percent tariff he had previously threatened to slap on Indonesian goods back in April. He decided to lower it to 19 percent, although its effective date remained to be announced. The tariff fiasco first emerged following Trump's concerns over trade imbalances.
The US reported to have recorded a $17.9 billion goods deficit with Indonesia in 2024. The overall bilateral goods trade amounted to an estimated $38.3 billion that year. The US had imported $28.1 billion from the Southeast Asian country, almost triple what Washington had exported. Indonesia recently agreed to get rid of its tariffs on American goods – except for pork and alcoholic beverages – in return for the lower-than-promised rate, thus possibly enabling Washington to ramp up its exports.
"But I think once we finish finalizing the tariff deal, our trade with the US, which now reaches around $40 billion, can double in five years. The $80 billion trade will be balanced, but that's okay. It's a huge increase," Kadin's chief Anindya Bakrie told reporters in Jakarta on Monday evening.
Under the deal, Indonesian goods can face higher duties if they are deemed as transshipments from higher-tariffed countries. Trump's letter did not directly mention the possibility of Chinese goods being passed off as being made in Indonesia. However, it's a well-known fact that the American tycoon is worried about Chinese transhipping. This is the practice of transporting cargo containers from one vessel to another while in transit to avoid trade restrictions.
Anindya was among the Indonesian businessmen that senior minister Airlangga Hartarto had invited to his office that day for a briefing on the tariffs. The press later asked Anindya whether Airlangga had instructed Kadin and other private sector representatives to prioritize American investors amidst the US-China rivalry, not to mention the transhipment issue. For context, China continues to be in the top 3 of Indonesia's largest sources of foreign direct investment over the past five years. Chinese investments already reached $1.8 billion in the first quarter of 2025, only behind Hong Kong's $2.2 billion. This marked a huge gap compared to $802.2 million US investments over the same three-month period.
"Transshipments by nature are about transits. But when it comes to [investments], we are building the industries. Indonesia is open to anyone, so there is no mandate that the investors must come from the US or that we have to exclude China," Anindya stated.
"We are a country that embraces a free and active foreign policy," the business magnate said, while pointing out how it was important for Indonesia to attract as many investments as it could to achieve an economic growth of beyond 5 percent.
Airlangga told the press that the 19 percent tariff deal was already "final and binding". However, its entry into force will have to wait for a joint statement that both governments are currently drafting. The 19 percent duty can also kick in "faster or later than" the initial August 1 deadline, depending on the joint statement.
"In the meantime, our goods are currently subject to the 10 percent baseline tariff," Airlangga said.