Indonesia-United States Agreement Continues Despite U.S Supreme Court Ruling on Tariffs

Coordinating Minister for Economic Affairs Airlangga Hartanto and Cabinet Secretary Teddy Indra Wijaya on a press briefing in Washington D.C. (02/22)

The Government has ensured that the trade agreement between Indonesia and the United States continues to proceed in accordance with the agreed mechanisms, despite the recent U.S. Supreme Court ruling on global tariff policies. This was conveyed by Coordinating Minister for Economic Affairs Airlangga Hartarto in a press statement alongside Cabinet Secretary Teddy Indra Wijaya in Washington, D.C., United States, on Saturday (02/21).

The Coordinating Minister explained that the Supreme Court’s ruling concerns the cancellation of global tariffs and the reimbursement of tariffs to certain corporations. However, the bilateral agreement between Indonesia and the United States remains in process because it has its own mechanism.

“For Indonesia, which has already signed the agreement, this is an agreement between two countries. It is still in process because the agreement stipulates that it will take effect within 60 days after signing, and each party will consult with the necessary institutions. This means that the United States may need to consult with Congress or the Senate, while Indonesia will consult with the House of Representatives (DPR),” the Coordinating Minister explained.

Under the agreement, Indonesia has requested that the 0 percent tariff scheme already agreed for several commodities be maintained, particularly agricultural products such as coffee and cocoa, which have specific arrangements under an executive order.

“Alhamdulillah, Indonesia has signed the agreement, and requested that those already granted 0 percent should remain so, while others are subject to 10 percent,” he added.

In addition to the agricultural sector, the 0 percent tariff scheme also covers several parts of the industrial supply chain, including electronics, crude palm oil (CPO), textiles, and related products. The Government is currently awaiting developments over the next 60 days, including further decisions by U.S. authorities regarding countries that have signed agreements.

The Coordinating Minister emphasized that there will be a policy distinction between countries that have signed agreements and those that have not, ensuring that Indonesia can implement the agreement. Regarding the temporary 10 percent tariff policy in effect for 150 days, the Government considers this condition to be more favorable than the previous position.

Cabinet Secretary Teddy Indra Wijaya added that prior to the Supreme Court ruling, Indonesia had successfully reduced the potential tariff from 32 percent to 19 percent through direct diplomacy by the two Presidents.

“After the Supreme Court ruling, moving from 19 percent to 10 percent is mathematically better. But essentially, Indonesia is prepared for all possible scenarios. Better safe than sorry,” the Cabinet Secretary emphasized.

The ministers have also reported to President Prabowo, and the President instructed that all potential risks be studied comprehensively and prepared with various scenarios.

The Government affirmed that diplomacy and negotiations will continue in a measured and adaptive manner, with national interest as the top priority. Indonesia ensures that the implementation of the trade agreement will provide concrete benefits for economic stability and national competitiveness amid global dynamics. (BPMI of Presidential Secretariat) (RD/MMB)