Govt: Lifting Import Duties on US Goods Won't Significantly Affect Indonesia's Revenue

TEMPO.CO, Jakarta - The Director General of Economic and Fiscal Policy at the Indonesian Ministry of Finance, Febrio Kacaribu, said that the exemption of import duties on products from the United States will not have a significant impact on the state's revenue. This is because the value of imports from the U.S. that have been subject to tariffs so far is not large.

Febrio stated that the total value of imported products from the U.S. so far is only about 2-3 percent of the total national imports. "So the impact is not too significant," he said at the Ministry of Coordinating for the Economy office, Jakarta, Monday, July 21, 2025.

U.S. President Donald Trump has reduced import tariffs for Indonesian products to 19 percent from the previous 32 percent. In return, products exported from the U.S. to Indonesia will be tariff-free or have a 0 percent import duty.

Previously, Secretary of the Ministry of Coordinating for the Economy Susiwijono Moegiarso explained that out of a total of 11,552 tariff lines in the Harmonized System (HS) system, around 11,474 lines or about 99 percent of U.S. products will qualify for tariff exemptions. However, He emphasized that not all U.S. products will be exempt from tariffs when entering Indonesia.

"So it's zero percent for all products, except for some that we are currently discussing not to be set at zero percent. For example, they agreed on alcoholic beverages and products that are practically impossible to import. However, we requested that the zero percent tariff not be applied to pork," said Susiwijono as quoted from Antara.

Meanwhile, Mohammad Faisal, Executive Director of the Center of Reform on Economics (CORE) Indonesia, said that a 0 percent import tariff would have a negative impact. So far, he said, the amount of import tariffs on U.S. products has varied. However, if exempted, it will impact the state budget's revenue.

"Because a zero percent import duty will result in significant losses as the import duties for U.S. products that were originally above 10 percent entering Indonesia," said Faisal.

In addition, this tariff exemption will provide enormous access to U.S. products, which will impact local products, especially in the agricultural sector. Faisal believes that this could pose a new challenge for Indonesia to increase domestic production capacity and achieve self-sufficiency targets.

Domestic products will compete with imported agricultural products from the U.S. "The question is, does this align with efforts to strengthen the agricultural sector and downstreaming the agricultural sector?" he said.

Editor's Choice: Govt: Not All U.S. Products Eligible for 0% Tariff, Alcohol and Pork Excluded

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