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List Of Prabowo's Enticements To Trump So That The US Lowers Import Tariffs

President Prabowo Subianto plans to convey an official stance in response to the imposition of new import tariffs by United States President Donald Trump today, Tuesday (8/4/2025). This was conveyed by Coordinating Minister for the Economy Airlangga Hartarto at the Coordinating Ministry office, Monday (7/4/2025). However, in Majalengka on the sidelines of the main harvest, Prabowo had time to mention Indonesia's stance on Trump's tariff policy.

Prabowo admitted that he remained optimistic about the import tariff policy. According to him, the government will negotiate to provide relief on American import tariffs. "We are calm. We have the strength and we will negotiate," he said. He said that Indonesia wants to establish good, fair, and equal relations with every country. According to him, Indonesia does not feel threatened or worried, even though there are challenges faced in international trade relations. Therefore, Prabowo is aware of what America is feeling with the increasingly widening trade deficit. For this reason, Indonesia is ready to open negotiations to accommodate the US request. "So what they ask for, if it makes sense, we must respect it.

American leaders think about the interests of the American people, and we think about the interests of our people," Prabowo said. Separately, Airlangga ensured that Indonesia would not take retaliatory steps or countermeasures as conveyed by Prabowo after meeting at the State Palace. Indonesia, he continued, would take the negotiation path. He stated that the Indonesian government did not need to follow Vietnam's steps which decided to lower import duties on all US imports to 0%. The reason is that import tariffs on US goods to Indonesia are already low, namely 5% or even 0% for soybean and wheat products. Therefore, the government prefers to negotiate through non-tariff policies.

First, the initial step that Indonesia will take is to increase imports of goods from the US to reduce the trade surplus with Uncle Sam's country. Based on data from the Central Statistics Agency, the US is the largest contributor to the trade surplus in 2024, which is US$16.8 billion. Airlangga explained that the US 'only' contributed 13% to global trade. Therefore, the increase in tariffs in the US should be a driver to increase trade with other countries. "The world economy is 83% non-American, 13% is the US. We must increase that 83%," said Airlangga. Meanwhile, based on the official website of the United States Trade Representative (USTR), the US is the 2nd largest trading country in the world after China.

The value of US exports and imports of goods and services was worth more than US$7.0 trillion in 2022. For exports of goods, the US is the 2nd largest exporter in the world after China. The contribution of US exports of goods to the world reached US$2.1 trillion in 2022. For imports of goods, the US is the largest importing country in the world. Total US imports of goods from the world reached US$3.2 trillion in 2022. Second, revise the rules on the domestic component level (TKDN) for products from America, because this is considered to hinder the entry of goods from the US. This step is part of the negotiations over the reciprocal tariff policy implemented by US President Donald Trump.

Third, the government will consider revising the application of value added tax (VAT) and income tax (PPh) on imports of US products. Currently, the general import VAT rate is 11%, while the general import PPh rate is 2.5% (for API/Importer Identification Number holders) or 7.5% (without API). Deputy Minister of Industry Faisol Reza added that the government is also reviewing the reduction of TKDN specifically for US products. However, he asked all parties to be patient because there is no certainty yet. 

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Tag: Donald Trump Prabowo Subianto Value Added Tax