Indonesia Continues Push for Bilateral Zero-Tariff Agreement
Indonesia’s President Prabowo Subianto has officially confirmed that crucial negotiations with the United States regarding the implementation of a zero-tariff import regime are actively proceeding.
Speaking on the sidelines of the 2025 APEC Summit in Gyeongju, South Korea, on Friday, the President stated, “Yes, negotiations are still ongoing.”
The central objective of these high-stakes discussions is to substantially expand bilateral trade cooperation between the two nations, with a particular focus on increasing the competitiveness of Indonesia’s most vital and leading export commodities in the immense US market.
Corroborating the President’s update, Coordinating Minister for Economic Affairs Airlangga Hartarto confirmed that detailed follow-up discussions with US trade representatives are scheduled to continue immediately after the conclusion of the APEC Summit.
Hartarto elaborated on the scope of the commodities proposed for the zero-tariff treatment, indicating that they are largely aligned with the list previously agreed upon in a similar trade pact with Malaysia.
This proposed list primarily includes key Indonesian agricultural and natural resource exports, such as palm oil, cocoa, rubber, and a variety of other goods that are not domestically produced in the US, thereby mitigating any potential direct competition with American industries.
This strategic focus on securing zero-tariff access for these major commodities is viewed as a vital step for Indonesia to level the playing field with regional competitors and capture a larger share of the lucrative US consumer market.
Targeting Parity with Regional Competitors on Import Tariffs
A significant driving force behind Indonesia’s sustained negotiation efforts for the zero-tariff regime is the strategic necessity of achieving parity with the favorable terms recently secured by its neighbor, Malaysia.
Indonesia is specifically aiming to lower the US import tariffs on its palm oil exports to zero percent, mirroring the advantageous agreement Malaysia successfully concluded with the US.
As of late October, Acting Director General of Agro-Industry Putu Juli Ardika provided insight into the progress, noting that this specific tariff negotiation is still in active progress.
Ardika expressed a clear goal for the Indonesian delegation, stating, “Hopefully, in the discussions, we can at least be on par with Malaysia.”
His optimism is rooted in Malaysia’s recent success in lowering its US import tariffs from an initial 25 percent to a more competitive 19 percent under a newly signed reciprocal tariff agreement with Washington.
Furthermore, the Malaysian agreement included key products such as palm oil, rubber, wood products, aviation components, and pharmaceuticals, all of which were either granted exemptions or had their tariffs reduced to a zero-tariff rate by the US government.
Ardika is confident that if Indonesia can secure a comparable deal, it would immediately allow the nation to compete on an equal footing with Malaysia within the critical US market, thereby eliminating a present competitive disadvantage and boosting the overall volume and value of Indonesian exports.
Critical Minerals and the Future of Supply Chain Integration
Beyond the immediate goal of securing zero-tariff access for agricultural and rubber commodities, Minister Hartarto revealed that discussions concerning critical minerals are being conducted as a completely separate, high-priority negotiation track.
He explicitly stated that “Critical minerals are being discussed separately, related to the supply chain,” emphasizing the distinct strategic importance of these materials in the global economy and their link to international industrial supply chains.
In official diplomatic language, these materials are often referenced in joint statements as “industrial communities,” signaling their role in manufacturing and advanced technologies.
The differentiation in negotiation tracks highlights the Indonesian government’s recognition of the geopolitical and industrial significance of critical minerals, which are crucial for electric vehicles, renewable energy infrastructure, and high-tech manufacturing.
Securing a favorable arrangement for these minerals is essential for integrating Indonesia deeper into the global high-value manufacturing supply chain.
While the zero-tariff talks focus on traditional exports to improve market access and competition for Indonesian products, the critical minerals discussions are aimed at long-term strategic positioning and securing large-scale foreign investment in Indonesia’s processing and resource sectors.
The successful conclusion of both the zero-tariff agreement and the critical minerals arrangement would collectively represent a major diplomatic and economic victory, solidifying Indonesia’s status as an increasingly vital trade and industrial partner for the United States.
