Indonesia Braces for New Trade Measures as US Temporary Tariff Expires

Indonesia is bracing for potential new United States tariffs as Washington prepares to impose fresh levies on dozens of countries before its temporary 10 percent global tariff expires this week.

“The [US] investigation has been conducted [on Section 301] and Indonesia has provided its explanation and clarifications,” spokesman for the Office of the Coordinating Economy Minister, Haryo Limanseto, told The Jakarta Post on Wednesday.

“At present, the countries concerned are waiting for the office of the US Trade Representative’s [USTR] mechanism on the tariffs and the final results of the Section 301 investigation,” he continued.

The temporary 10 percent global duty was imposed by US President Donald Trump this year after a swath of his tariffs were struck down by the Supreme Court last February, but this levy is set to lapse on Friday.

Washington has been working on a new tariff strategy and seeking alternative legal authorities to maintain tariff pressure following the Supreme Court's decision.

In early June, the USTR proposed more tariffs of up to 12.5 percent on imports from 60 economies, brought under Section 301 of the Trade Act of 1974, with duties being imposed in response to alleged forced labor issues and unfair trade practices.

“We expect to see some action soon. I can't really specify a timeline right now,” Greer told CNBC, when asked about a Financial Times report that the administration was preparing to announce new tariffs on dozens of countries.

The FT report said the most immediate new duties were expected to be broadly in line with the 10 percent tariffs currently in place, although the administration was pursuing other investigations that could provide legal grounds for higher tariffs.

Brazil became the first country to be targeted under the strategy, after it was hit with 25 percent duties on its furniture, ethanol, machinery, footwear, sugar and other goods last week.

On Monday, Washington unveiled a 50-percent levy on many Canadian products to take effect in 30 days, citing alleged trade discrimination against multiple US industries.

Canadian Prime Minister Mark Carney said on Tuesday that he was looking at "all options," adding that he and Trump had agreed to "intensify discussions" in the coming weeks on a possible deal.

On Tuesday, Trump also announced a new 100 percent sector-specific tariff on imported generic drugs to take effect from August 2028, with that level rising to 200 percent in 2029.

Jakarta’s Responses

Indonesia is among 14 economies facing a proposed 10 percent tariff linked to a US investigation into alleged forced-labor concerns.

As a defense, Jakarta stated that it has strengthened its safeguards against forced-labor imports through Trade Minister Regulation No. 9/2026, issued earlier this year, which seeks to ensure imported goods are not produced using forced labor.  

In June, the government estimated the final tariff burden on Indonesian goods exported to the US could reach about 18 percent, under a “stacking” mechanism that combines multiple levies.

The total would include an initial 10 percent tariff tied to forced-labor concerns, expected to take effect first, followed weeks later by an additional component linked to structural overcapacity, according to Susiwijono Moegiarso, secretary to the coordinating economy minister.

On the other hand, the government sees some benefits from the negotiations despite the tariff threat, including US backing for its accession process to the Organisation for Economic Co-operation and Development (OECD), a grouping of mostly advanced economies.

“Several commitments that have been agreed are seen as supporting Indonesia’s accession process to the OECD," Susiwijono said in a statement on June 8.

The final rate would still depend on product exemptions negotiated with Washington and the outcome of ongoing processes in the US, he said. Countries affected by the measures, including Indonesia, will still be allowed to submit comments and present arguments before full implementation.
 

Source: The Jakarta Post

Indonesia to Exempt China, Australia, Canada from Export FX Retention Rule

Indonesia plans to exempt China, Australia, and Canada from its requirement that natural resource exporters retain foreign exchange earnings in the domestic banking system, Coordinating Economic Affairs Minister Airlangga Hartarto said on Thursday.

The rule, which took effect in June 2026, requires exporters of natural resources to keep their foreign currency export proceeds in Indonesian banks for a specified period as part of the government's efforts to strengthen domestic liquidity and support the rupiah.

Airlangga said the government is preparing to expand the list of exempted countries to include those that have bilateral or multilateral trade agreements with Indonesia.

"Several countries will be exempted because we have extensive bilateral agreements with them, including the United States, China, Australia, and Canada. They are also members of the WTO," Airlangga told reporters in Jakarta.

Previously, only the United States was exempt from the policy.

The regulation allows exemptions for countries that have bilateral agreements or other trade arrangements with Indonesia. Although the policy has been in effect since June, the government continues to review its implementation and assess its effectiveness, Airlangga said.

Finance Minister Purbaya Yudhi Sadewa has said the policy is intended to ensure that exporters retain more of their foreign exchange earnings within Indonesia rather than depositing them overseas. The measure is expected to bolster liquidity in the domestic banking system while helping support the stability of the rupiah.

Source: Jakarta Globe

Indonesia Advances 93 Hydrogen Projects Worth USD 2 Billion

The Energy and Mineral Resources (ESDM) Ministry revealed 93 hydrogen ecosystem development initiatives currently underway across Indonesia, representing a total investment value of Rp32 trillion (approximately US$2.05 billion).

Speaking at the opening of the Global Hydrogen Ecosystem Summit & Exhibition 2026 in Jakarta on Tuesday (July 21), the ministry’s Director General of New, Renewable Energy and Energy Conservation Eniya Listiani Dewi emphasized that the government is actively overseeing these high-value projects to ensure swift execution.

These initiatives, according to her, align directly with ESDM Minister Bahlil Lahadalia’s directive to accelerate "dedieselization"—the systematic replacement of diesel-fueled power generation with cleaner alternatives.

Among the priority developments is a renewable energy project in Sumba, East Nusa Tenggara, targeted for operational launch by 2028.

Additionally, a proof-of-concept project on Rengit Island, carried out in collaboration with state utility PT PLN, utilizes solar power plants coupled with hydrogen energy storage to power remote communities.

In the geothermal sector, state energy firm PT Pertamina has initiated green hydrogen production powered by geothermal energy at the Ulubelu field in Lampung.

Eniya noted that expanding the domestic hydrogen ecosystem is expected to enhance Indonesia’s energy security index, raising its score from 7 to 8 out of 10.

"We want to tap into our own energy resources, not rely on others," Eniya said, stressing that realizing this potential requires multi-stakeholder collaboration among government agencies, state-owned enterprises (SOEs), industry players, research bodies and international partners.

Coinciding with the summit, the government launched the Hydrogen Diesel Dual Fuel (H2 DDF) Bus Pilot program in partnership with state-owned transit operator Perum DAMRI.

The initiative modifies conventional diesel engines to run on a blend of diesel and hydrogen, serving as Indonesia's inaugural step toward implementing low-carbon public transit.

The pilot program aims to reduce imported diesel consumption, lower tailpipe emissions, build a low-carbon transport ecosystem and lay the groundwork for commercial vehicle deployment.

"This technology will not only be used in buses, but also scaled to passenger cars, drones, forklifts and hydrogen-powered household stoves," Eniya concluded.

Source: ANTARA News