 Source – Tim G, Unsplash |
In exchange for lowering the tariff rate from 32% to 19%, Indonesia will be offering the United States, among other concessions, unrestricted access to Indonesia’s agriculture market, including commodities such as chicken, beef and corn feed. This is in addition to the Indonesian government agreeing to directly purchase US$4.5 billion worth of U.S. agricultural products.
President Trump touted the agreement as “a great deal for everyone,” giving the U.S. historic market access to Southeast Asia’s largest economy. President Prabowo has meanwhile hailed this as a “new era of mutual benefit,” though concerns have been raised regarding the financing of these purchases as well as the impact this will have on local farmers.
Special counsel to President Prabowo on international trade, Mari Pangestu has assured local businesses that the government will prioritize importing commodities that Indonesia does not produce enough of domestically and will minimize distorting local production or competing too much with imports from other Asian trade partners.