Indonesia eases import curb, negotiates U.S. tariffs as currency, stocks fall

Indonesia will relax its import routes and send a team, including senior Treasury Secretary Sri Mulyani Indrawati, to hold trade talks to Washington, D.C. next week as President Prabowo Subianto seeks ways to mitigate the impact of higher tariffs imposed by the U.S. on Southeast Asia’s largest economy.

According to a statement from the Presidential Palace, coordinated Economy Minister Airlangga Hartarto and Foreign Minister Sugiono will hold trade talks with Indrawati. Indonesia is joining other Southeast Asian countries, such as Malaysia and Vietnam, seeking diplomatic solutions to resolve the U.S. tariff war

The rupee sank 1.8% and closed on Tuesday at a record low for green satellites, while the benchmark Indonesian stock index recovered 7.9% after a week-long holiday. As President Donald Trump expands the initial trade war against China to many countries around the world, the United States imposes a 32% tariff on Indonesian goods.

Market crash has eliminated over $9 billion according to the fate of Indonesian billionaires Forbes' Real-time data. Energy and petrochemical tycoon Prajogo Pangestu's net worth fell by $1.8 billion to $15.1 billion.

“China-U.S. dynamic long-term trade tensions and ripple effects could have a significant impact on Indonesian companies (Indonesian) companies, especially if sentiment continues to weaken Rupiah,” broker UOB-KAY HIAN said in a research note on Tuesday. The United States is Indonesia's second largest export market (after China), with total exports reaching $26 billion in 2024.

Prabowo seeks to mitigate the impact of U.S. tariffs, saying Indonesia is removing import quotas. Indonesia has also raised local content requirements for local goods sold in the country, a policy that led to a ban on selling Apple's iPhone 16 domestically last year.

“I have instructed ministers to remove import quotas, especially those related to the livelihoods of many,” the president said in a live session with his cabinet and business leaders on Tuesday.

Indonesia has also pledged to buy more goods, such as drilling equipment and goods including U.S. soybeans, to narrow the trade deficit to narrow the world's largest economy. U.S. import tariffs on steel and medical equipment will also be reduced from 5-10% to 0-5%.

“We need oil, we need to drill technology tools from them to open up 10,000 old wells using new technology,” Prabowo said.