Indonesia Removes Import Duty on U.S. Products, What Are the Implications?

The Indonesian government has officially set a 0% import duty on a range of products from the United States (U.S.) as part of the latest trade agreement between President Prabowo Subianto and U.S. President Donald Trump. According to data from the Ministry of Trade, the policy covers 11,474 HS tariff lines out of a total of 11,552 (99%), while sensitive products such as alcoholic beverages and pork remain excluded.

Top 10 U.S. Products Granted Zero Tariff

Key commodities benefiting from this policy include:

• Mineral fuels – US$1.63 billion

• Oil seeds & oleaginous fruits (including soybeans, corn) – US$1.26 billion

• Machinery & mechanical appliances – US$1.21 billion

• Organic chemicals – US$0.91 billion

• Industrial food residues – US$0.62 billion

• Aircraft & aircraft parts – US$0.52 billion

• Electrical machinery & equipment – US$0.44 billion

• Wood pulp & paper products – US$0.40 billion

• Optical instruments & precision tools – US$0.27 billion

• Dairy products, eggs, and honey – US$0.21 billion

Economic Impact and Concerns

With this policy, U.S. products such as soybeans, corn, wheat, fuel, Boeing aircraft, and industrial goods are expected to become more affordable in the Indonesian market. However, the move has raised concerns about the competitiveness of local producers.

The government emphasized that this policy aims to strengthen bilateral trade and attract U.S. investment in the energy and raw material sectors.

Trade Value and Future Outlook

U.S. exports to Indonesia reached US$10.2 billion in 2024, or approximately Rp166 trillion. With the removal of import duties, trade volumes are projected to increase, paving the way for greater economic openness. However, maintaining protection for strategic sectors remains essential to ensure domestic market stability.