TEMPO.CO, Jakarta - U.S. President Donald Trump recently announced an import tariff of 32 percent on Indonesian products, set to take effect on August 1, 2025. However, Trump said that Indonesia could be exempted from this tariff if it establishes manufacturing facilities in the United States.
"There will be no Tariff if Indonesia, or companies within your Country, decide to build or manufacture product within the United States," Trump conveyed in a letter on White House letterhead addressed to President Prabowo Subianto. The letter was publicly posted by Trump via his Truth Social account, @realDonaldTrump, on Tuesday, July 8, 2025.
Furthermore, Trump assured that all necessary permits would be processed "quickly, professionally, and routinely — In other words, in a matter of weeks."
Conversely, Trump warned that if Indonesia were to raise import tariffs on U.S. products, he would increase the U.S. tariff proportionally.
According to Trump, the 32 percent tariff is "far less" than the amount needed to balance the trade deficit with Indonesia. Previously, the Office of the United States Trade Representative (USTR) reported a trade deficit of up to US$17.9 billion with Indonesia in 2024.
Trump asserted that this tariff is necessary to rectify the years-long deficit caused by various trade barriers from Indonesia, including tariffs and non-tariff measures. "This Deficit is a major threat to our Economy and, indeed, our National Security!" Trump declared. Nevertheless, he noted that this decision could still be adjusted based on the development of U.S.-Indonesian relations.
Meanwhile, Coordinating Minister for Economic Affairs Airlangga Hartarto is currently en route to Washington, D.C., United States, to discuss the implementation of the tariff. The Head of the Presidential Communication Office, Hasan Nasbi, confirmed that Airlangga departed from Rio de Janeiro after attending the BRICS High-Level Conference in Brazil on July 7, 2025.
"Our negotiating team is already in DC (Washington, D.C.). This morning, our negotiating team, who will continue the discussion, is already in DC, and the Minister of Economy is on his way from Rio to DC," Hasan stated during a press conference at the Presidential Communication Office in Jakarta on July 8, 2025.
Hasan mentioned that Airlangga would provide details on the technical aspects of the negotiation process. He emphasized that Trump's letter, by setting the tariff's effective date to August 1, 2025, effectively extends the negotiation period. Initially, Trump had set a deadline of 90 days, or July 9, 2025, for the implementation of import tariffs on Indonesia.
Eka Yudha Saputra contributed to the report
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