Hendra Wardana, economist and founder of Stocknow.id, noted that President Prabowo Subianto's inclination to use diplomatic means amid the ongoing tariff war underscores Indonesia's commitment to maintaining a suitable ecosystem for investment.
"The government's plan to pursue negotiation and avoid retaliation has led the international market to be optimistic of Indonesia's openness to investments and determination to maintain stability for the long term," he told ANTARA in Jakarta on Wednesday.
The expert highlighted several strategies devised by the Indonesian government to support these negotiations, such as relaxing the domestic component level (TKDN) requirement for products related to information and communication technology.
He further explained that the government also aims to strengthen its bargaining position by evaluating the policy of restricting the entry of certain items and boosting the import volume of agricultural commodities from the US.
Related news: Prabowo seeks layoff task force to address US tariff implications
In response to the 32 percent import tariff imposed on Indonesian products by the US government under President Donald Trump, Jakarta decided to negotiate with Washington to identify the best solution.
To that end, the Indonesian government, in addition to the mentioned strategies, eyes the revitalization of the trade and investment framework agreement it has forged with the US.
Indonesia will also strive to persuade Trump's administration through increased purchases of oil and gas from the US.
Additionally, the government intends to employ fiscal and non-fiscal incentives, including a reduction in import duties and related levies, to boost the imports of US products while maintaining Indonesia's export capacity.
Related news: Indonesia plans policy moves to counter US tariff impact
Reporter: Muhammad H, Tegar Nurfitra
Editor: Yuni Arisandy Sinaga
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