US Reciprocal Tariff 32 Percent, Government Prepares High-Level Lobbying Team

JAKARTA, KOMPAS – The Indonesian government is currently assessing the impact of the reciprocal tariffs imposed by the United States. A high-level lobbying team has been prepared to engage in negotiations regarding this policy. Regulatory simplification is another effort aimed at enhancing the competitiveness of domestic products.

As reported, the President of the United States, Donald Trump, announced a list of base tariffs and import duties on numerous trading partner countries on Wednesday evening (2/4/2025) Washington time, or Thursday morning (3/4/2025) WIB. In the announced list, Indonesia was subjected to a reciprocal tariff of 32 percent.

As of the second day of the implementation of the reciprocal tariff policy, Friday (4/4/2025), President Prabowo has yet to provide his response. He also appeared reluctant when questioned about the matter during a doorstep interview at the Jakarta Cathedral Church on Friday afternoon. His response was merely a wave of the hand toward reporters.

So far, a response has only been issued by the Head of the Presidential Communication Office, Hasan Nasbi, through a short message sent on Friday afternoon. Several measures have been prepared by the government to address the challenge of reciprocal tariffs.

"The government is carefully calculating the impact of the reciprocal tariff implementation carried out by the US (United States) government," wrote Hasan in his text message.

Not only conducting studies, Hasan continued, the government is also undertaking other efforts simultaneously. A lobbying team will also be sent by the government to negotiate with the U.S. government, as the party issuing the policy.

"In parallel with that, the government also sent a high-level lobbying team to negotiate with the US government," said Hasan.

Furthermore, Hasan continued, another measure focused on domestic business actors is also being prepared. This concerns efforts to simplify regulations that have so far hindered domestically produced goods from competing.

"Domestically, the government is also implementing regulatory simplification so that Indonesian products can be more competitive," said Hasan.

Previously, on Thursday (3/4/2025) night, Secretary of the Coordinating Ministry for Economic Affairs Susiwijono Moegiarso, said that the imposition of reciprocal tariffs would have a significant impact on the competitiveness of Indonesian export products in the US market. So far, Indonesia's main export products in the US market include electronics, textiles and textile products, footwear, palm oil, rubber, furniture, shrimp, and marine fishery products.

"We will soon calculate the impact of the US reciprocal tariffs on these commodities. We will also take strategic steps to mitigate the negative impact on Indonesia's national economy," said Susiwijono, as reported by Kompas (3/4/2025).

Since early 2025, Suswijono said, the Indonesian government has prepared various strategies and steps to deal with the implementation of new US tariffs. He also revealed that negotiations have also been carried out with the US government.

Intensive coordination has been carried out by cross-ministerial teams and Indonesian representative institutions in the US, and national business actors, in order to face US reciprocal tariffs. Not only that, communication at various levels has also been established with the US Government.

"We will soon send a high-level delegation to Washington DC to negotiate directly with the US Government. Indonesia has also communicated with Malaysia as the holder of the ASEAN Chair to take joint steps considering that all 10 ASEAN countries are affected by the imposition of US reciprocal tariffs," said Susiwijono.

In fact, Indonesia's reciprocal tariff is relatively lower than a number of other ASEAN member countries. The highest tariff is imposed on Cambodia, which is 49 percent. Vietnam follows after with 46 percent, followed by the third highest by Thailand at 36 percent.

However, there are other ASEAN member countries that receive lower reciprocal rates than Indonesia. Some of these countries are Malaysia (24 percent), Singapore (10 percent), and the Philippines (17 percent).

In addition to strategic steps in the trade sector, Susiwijono added, another effort that is being taken is to maintain the trust of market players. The government is committed to maintaining the stability of Government Securities (SBN) yields amidst global financial market turmoil following the announcement of US reciprocal tariffs.

Together with Bank Indonesia (BI), the government continues to maintain the stability of the Rupiah exchange rate. Foreign exchange liquidity is ensured to be maintained so that it can continue to support the needs of business actors and maintain economic stability.

"We will also improve the investment climate and increase economic growth and create extensive employment opportunities," said Susiwijono.

The suggestion to build multilateral diplomacy related to US reciprocal tariffs was previously conveyed by public policy observer from Gadjah Mada University (UGM), Gabriel Lele. Bilateral diplomacy efforts should be avoided. The reason is, it is necessary to re-examine how strong Indonesia's bargaining position is in the eyes of the US. It is feared that if only bilateral diplomacy, there is a tendency to entertain a "trade war".

Multilateral paths, Gabriel explained, can be pursued through Indonesia's participation in various organizations such as ASEAN, APEC, and the WTO. This multilateral step is more possible considering that the country affected by US policies is not only Indonesia.

"So Indonesia is not moving alone. There are other countries that can be involved in discussing this such as China, the European Union, and others. If they face it together, they will have a stronger bargaining position," said Gabriel Lele.