JAKARTA, RAKYAT NEWS – Indonesia’s Trade Minister, Budi Santoso, reaffirmed the government’s commitment to maintaining a trade surplus with the United States despite the ongoing shifts in global trade policies under the administration of President Donald J. Trump. His statements came in response to the new tariffs imposed by the U.S. government, specifically targeting several countries, including Indonesia.

According to data from the Central Statistics Agency (BPS), Indonesia’s trade surplus with the U.S. reached $1.75 billion in 2024, marking a 32.6% increase from the previous year.

To sustain this surplus, the Indonesian government plans to diversify the products it exports to the U.S., with a focus on goods that are not currently produced in the United States.

Minister Budi emphasized the importance of expanding the range of exports, stating, “This strategy aims to ensure that Indonesia’s trade balance with the U.S. remains positive,” he explained during a press conference in Jakarta on February 5, 2025.

In addition to diversifying exports, Minister Budi noted that the U.S. tariffs are likely an attempt to encourage more direct investment into U.S. production facilities. This would allow U.S.-based manufacturing to take over production in certain sectors, reducing competition for products that Indonesia can still supply.

With this in mind, the Indonesian government is actively engaging with exporters to identify the best ways to adapt to these changes and preserve their market access in the U.S.

The government has also been exploring new avenues for bilateral cooperation with the U.S. to ease trade flows. Discussions with U.S. counterparts are ongoing to assess how to improve the current trade agreement and respond to the evolving dynamics in global commerce.

“We have anticipated these changes ever since Trump took office, and we are now refining our mitigation strategies,” Budi said, adding that the government is exploring the potential of the Indonesia-Canada Comprehensive Economic Partnership Agreement (ICA-CEPA) to facilitate trade with North America.

Furthermore, the ICA-CEPA is seen as a crucial agreement that could open up more opportunities for Indonesian products to enter the North American market, including the U.S. “This agreement provides important access to the U.S. market and neighboring regions,” said Budi.

He emphasized that this approach would allow Indonesia to continue strengthening its export relationships despite the broader trade challenges.

The tariffs imposed by the U.S. under President Trump have been part of a broader trend of protectionism, including additional import taxes on goods from Mexico, Canada, and China. The goal, according to Trump, is to curb illegal immigration and reduce drug trafficking. He acknowledged that these measures could cause some economic hardship but maintained that they are necessary for long-term national security and economic stability.

In response, Canada and Mexico are preparing retaliatory measures against the 25% tariffs imposed by the U.S., which could significantly disrupt their economies. Similarly, China has signaled that it will challenge the U.S. tariffs at the World Trade Organization (WTO), also preparing countermeasures in retaliation. These moves underscore the increasing tensions in international trade and the potential risks of a global trade war.

As Indonesia navigates these changes, it is crucial that the government remains flexible and proactive. Minister Budi’s statements highlight Indonesia’s dedication to adapting to shifting global trade policies and ensuring that the country’s economic interests are protected amidst an increasingly complex international environment. The government’s emphasis on diversification and strategic partnerships signals a resilient approach to preserving and enhancing Indonesia’s trade relationships, particularly with the U.S., in the face of evolving global dynamics.(Uki Ruknuddin)

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