Trade Minister Budi Santoso Gears up for Trade Agreement with US to Counter Donald Trump’s Tariff Policies
Jakarta, Indonesia – Trade Minister Budi Santoso has announced that preparations are underway to establish a trade agreement between Indonesia and the United States. This proactive step is being taken in anticipation of potentially more aggressive tariff policies by President-elect Donald Trump during his second term in office.
### Indonesia-US Trade Agreement Preparation
According to Minister Budi, while Indonesia’s exports to the US were not significantly affected during Trump’s first term from 2017 to 2021, he chooses to err on the side of caution by preparing a trade agreement to maintain robust trade relations with the US.
“We will attempt to approach what kind of formulation can establish good relations so that we can penetrate the US market. This is what we are preparing for,” he remarked during an encounter at the Export and Trade Services Human Resources Training Center in Grogol, West Jakarta, on Wednesday, January 15, 2025.
### Emphasizing Product Competitiveness
Additionally, Budi stressed the importance of enhancing Indonesia’s product competitiveness in the international market. Despite facing tariff challenges, he believes that if Indonesian products possess strong competitiveness, they will continue to compete effectively with other countries and not lag behind in the global market.
“What matters most is that we have competitiveness. So, if we maintain our competitiveness and compete with other countries, our competitiveness is good, and we will not lose,” he emphasized.
### Leveraging Existing Agreements
To facilitate the entry of Indonesian goods into the US market, Indonesia currently benefits from the Comprehensive Economic Partnership Agreement with Canada, known as ICA-CEPA. This agreement is utilized to ease access to the US market since Indonesia does not have a Free Trade Agreement (FTA) with the US.
Prior to this, Minister of Economic Affairs Coordinating Minister Airlangga Hartarto expressed no concern if President-elect Donald Trump implements more aggressive tariff policies towards many countries during his second term. Airlangga noted that the US has already imposed tariffs on some Indonesian products such as shoes, clothing, and other commodities.
“America imposes tariffs on our shoes, clothing, and various commodities, while Vietnam faces no tariffs,” he stated during the Business Competitiveness Outlook 2025 event in Jakarta on Monday, January 13, 2025.
By proactively preparing for potential changes in US trade policies, Indonesia aims to secure its economic interests and maintain a competitive edge in the global market. Minister Budi’s strategic approach underscores the importance of proactive diplomacy in navigating the complexities of international trade dynamics.
