he head of the National Economic Council (DEN) has hailed Jakarta’s newly inked trade deal with Washington, which has resulted in a reduction of the United States’ tariffs on Indonesian goods from 32 to 19 percent, as a “crucial stepping stone” to accelerate deregulation efforts as well as to reduce logistics and production costs.
“This deal makes Indonesia the country with the lowest additional US tariff burden among Southeast Asian nations that have a trade surplus with the US. That gives us a significant competitive edge,” DEN chief Luhut Binsar Pandjaitan, formerly the coordinating maritime affairs and investment minister, said in a statement on Thursday, as quoted by Antara.
Singapore is the only ASEAN country that is subject to the US baseline tariff of 10 percent.
US President Donald Trump sent letters last week to inform most other countries in the region of their latest tariff rates: Malaysia received a slightly increased rate of 25 percent, Cambodia received a reduced rate of 36 percent, both Laos and Myanmar saw their rates reduced to 40 percent, while Thailand’s rate remained unchanged at 36 percent.
Vietnam has meanwhile secured a deal with the US that resulted in a tariff rate of 20 percent, a significant cut from 46 percent previously.
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In his statement, Luhut also revealed that DEN had conducted a comparative macroeconomic analysis on Indonesia’s former and current tariff rates. The resulting projection showed that the 19 percent rate could lead to a 0.5 percent boost in gross domestic product (GDP), driven by stronger investment and consumption.