U.S. tariff deadline approaching, Indonesia loosens import regulations to facilitate goods entry
Jacarta, Indonesia is loosening import restrictions and regulations on various goods and raw materials to make business within the country less of a headache, as stated by officials on Monday, June 30. This move comes before the July 9 deadline for tariff discussions set by the United States.
Indonesia, Southeast Asia's largest economy, has historically been criticized by traders for excessive bureaucracy, a concern that was also brought up in a US Trade Representative report on trade barriers.
The relaxation includes the abolishment of import licenses for certain products and the omission of specific industrial raw materials, such as plastics and chemical products, from the import restrictions list, according to a presentation from Indonesian officials at a press conference.
Coordinating Minister for Economic Affairs Airlangga Hartarto said these changes will affect 10 categories of commodities and will be effective in two months. The policy actions aim to eliminate overlapping rules, simplify regulatory procedures, and provide businesses with a clear path for importing goods and raw materials[1][2][4].
Officials did not explicitly link the actions to trade talks with Washington.
"President Prabowo Subianto ordered all ministerial bodies to ensure the business licensing process isn't slowed down by excessive bureaucracy," said Satya Bhakti Parikesit, an official at Indonesia's state secretariat ministry.
Trade Minister Budi Santoso mentioned that restrictions will be reduced on products like fertilizers, forestry goods, and plastics. The new policy should offer more certainty to businesses by removing ambiguities[1][2].
The ease of import requirements and restrictions will also benefit businesses seeking an easier way to import raw materials, Deputy Industry Minister Faisol Reza added.
The US recorded a goods trade deficit with Indonesia of $17.9 billion in 2024, according to the US Trade Representative.
In a separate conversation with reporters, Airlangga said Indonesia has extended an investment opportunity in a critical minerals project to the United States as part of their tariff negotiations. Danantara Indonesia, a sovereign fund, will be a part of the project.
"What we're offering is investment in the electric vehicle ecosystem, related to nickel and other materials," Airlangga stated, declining to give specifics due to a non-disclosure agreement.
The policy changes announced by Indonesia's government aim to simplify regulatory procedures and provide clarity for businesses, particularly in the industry and finance sectors, as they strive to import goods and raw materials. This could potentially reduce ambiguities and offer more certainty in East Asia's business landscape. Additionally, Indonesia has extended an investment opportunity in a critical minerals project to the United States, notably in areas related to electric vehicles and nickel, as part of their ongoing trade discussions.
