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Indonesia offers to cut duties on US goods, purchase $500 million of wheat in tariff talks

Indonesia has offered near-zero tariffs on key U.S. imports and pledged to buy $500 million worth of U.S. wheat in trade talks aimed at lowering the 32% U.S. tariff on Indonesian goods. The $34 billion deal includes Garuda Indonesia purchasing Boeing planes. Indonesia seeks tariff cuts on exports like electronics and footwear, and invites U.S. investment in critical minerals.

JAKARTA — Indonesia has offered to cut duties on key imports from the US to “near zero” and to buy $500 million worth of US wheat as part of its tariff talks with Washington, its lead negotiator and a wheat industry association said.

Chief Economics Minister Airlangga Hartarto, who is Indonesia’s lead negotiator, also confirmed that state carrier Garuda Indonesia would buy more Boeing planes as part of a $34 billion pact with US partners due to be signed next week.

Indonesia, which ran a goods trade surplus of $17.9 billion with the United States in 2024 according to the US Trade Representative, is facing a 32% tariff in US markets and has proposed increasing US imports to facilitate trade talks between the two sides.

Mr. Airlangga said the Indonesian government has offered to cut tariffs on key American exports, including agricultural products, to near-zero from between 0% and 5% at present.

“It will be near zero (tariffs for US main exports), but it will depend as well on how much the tariffs we get from the US,” Mr. Airlangga said.

Garuda’s CEO has said it is in discussions with Boeing to buy up to 75 aircraft. Garuda group did not respond to requests for comment.

The chairman of Indonesia’s wheat flour mills association, Franciscus Welirang, said its “members will purchase two million tons in total through tenders with a competitive price.”

“The point is all of the members will buy US wheat,” Mr. Welirang, who is also a director at Indofood, told Reuters.

The US counterparts in the wheat deal include Cargill, Bunge Global SA, Pacificor, Archer-Daniels-Midland, Columbia Grain International, and United Grain Corporation, Mr. Welirang added.

US exports to Indonesia include soybeans, petroleum gases and aircraft, Indonesian government data showed.

When asked whether the trade talks include military deals, Mr. Airlangga said they were “not part of the negotiation.”

Susiwijono Moegiarso, a senior official with Indonesia’s Coordinating Ministry for Economic Affairs, told Reuters that in return, Jakarta has asked the US for preferential tariffs on its main exports, including electronics, textiles and footwear.

“We want them to lower the tariffs (for those goods) as low as possible,” he said.

Indonesia has also offered the US opportunities to invest in critical minerals projects, including in copper, nickel and bauxite. — Reuters

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Source : Business World

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