Indonesia offers to buy US aircraft, wheat in tariff negotiations
Airlangga Hartarto (pic), who is also the nation's lead negotiator, said the government has also offered near-zero tariffs on key American exports, including agriculture products, which he said pay tariffs of between 0% and 5%.
Jakarta is facing a 32% tariff in US markets. It previously said it would sign a US$34 billion pact with US partners next week, which includes commitments to buy more US goods as well as investment by Indonesian companies in the United States.
"It will be near zero (tariffs for US main exports), but it will depend as well on how much the tariffs we get from US," Airlangga said.
Garuda's CEO has said it is in discussions with US Boeing to buy up to 75 units of aircraft. Garuda and Indofood group did not immediately respond to requests for comment.
The US goods trade deficit with Indonesia was $17.9 billion in 2024, according to the US. Trade Representative. US exports to Indonesia include soybeans, petroleum gases and aircraft, Indonesian government data showed.
When asked whether the trade talks include military deals, Airlangga said they were "not part of the negotiation".
Susiwijono Moegiarso, a senior official with Indonesia's Coordinating Ministry for Economic Affairs, told Reuters that in return, Jakarta has asked the United States for preferential tariffs on its main exports, including electronics, textiles and footwear.
"We want them to lower the tariffs (for those goods) as low as possible," he added.
Indonesia has also offered the United States opportunities to invest in critical minerals projects, including in its abundant resources of copper, nickel and bauxite. - Reuters
Hashtags
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
The Star
6 hours ago
- The Star
US plans AI chip curbs on Malaysia, Thailand over China concerns
President Donald Trump's administration plans to restrict shipments of AI chips from the likes of Nvidia Corp. to Malaysia and Thailand, part of an effort to crack down on suspected semiconductor smuggling into China. A draft rule from the Commerce Department seeks to prevent China - to which the US has effectively banned sales of Nvidia's advanced AI processors - from obtaining those components through intermediaries in the two Southeast Asian nations, according to people familiar with the matter. The rule is not yet finalized and could still change, said the people, who requested anonymity to discuss private conversations. Officials plan to pair the Malaysia and Thailand controls with a formal rescission of global curbs from the so-called AI diffusion rule, the people said. That framework from the end of President Joe Biden's term drew objections from US allies and tech companies, including Nvidia. Washington would maintain semiconductor restrictions targeting China - imposed in 2022 and ramped up several times since - as well as more than 40 other countries covered by a 2023 measure, which Biden officials designed to address smuggling concerns and increase visibility into key markets. All told, the regulation would mark the first formal step in Trump's promised overhaul of his predecessor's AI diffusion approach - after the Commerce Department said in May that it would supplant that Biden rule with its own "bold, inclusive strategy.' But the draft measure is far from a comprehensive replacement, the people said. It doesn't answer, for example, questions about security conditions for the use of US chips in overseas data centers - a debate with particularly high stakes for the Middle East. It's unclear whether Trump officials may ultimately regulate AI chip shipments to a wider swath of countries, beyond the Malaysia and Thailand additions. The Commerce Department didn't respond to a request for comment. The agency has offered few specifics about its regulatory vision beyond what Secretary Howard Lutnick told lawmakers last month: The US will "allow our allies to buy AI chips, provided they're run by an approved American data center operator, and the cloud that touches that data center is an approved American operator,' he said during congressional testimony. Nvidia, the dominant maker of AI chips, declined to comment, while spokespeople for the Thai and Malaysian governments didn't respond. Nvidia Chief Executive Officer Jensen Huang has previously said there's "no evidence' of AI chip diversion, in general remarks that didn't touch on any particular country. In response to earlier Bloomberg queries about curbs focused on smuggling risks, Thailand said it's awaiting details, while Malaysia's Ministry of Investment, Trade and Industry said clear and consistent policies are essential for the tech sector. Washington officials for years have debated which countries should be able to import American AI chips - and under what conditions. On one hand, the world wants Nvidia hardware, and US policymakers want the world to build AI systems using American technology - before China can offer a compelling alternative. On the other, once those semiconductors leave American and allied shores, US officials worry the chips could somehow make their way to China, or that Chinese AI companies could benefit from remote access to data centers outside the Asian country. Southeast Asia is a key focus. Companies including Oracle Corp. are investing aggressively in data centers in Malaysia, and trade data shows that chip shipments there have surged in recent months. Under pressure from Washington, Malaysian officials have pledged to closely scrutinize those imports, but the Commerce Department's draft rule indicates the US still has concerns. Semiconductor sales to Malaysia also are a focal point of a court case in neighboring Singapore, where prosecutors have charged three men with defrauding customers about the ultimate destination of AI servers - originally shipped from the island nation to Malaysia - that may have contained advanced Nvidia chips. (Nvidia is not the subject of Singapore's investigation and has not been accused of any wrongdoing.) Related: Malaysia Downplays Huawei Deal as US Checks China's AI Reach The export curbs on Malaysia and Thailand would include several measures to ease pressure on companies with significant business operations there, people familiar with the matter said. One provision would allow firms headquartered in the US and a few dozen friendly nations to continue shipping AI chips to both countries, without seeking a license, for a few months after the rule is published, people familiar with the matter said. The license requirements also would still include certain exemptions to prevent supply chain disruptions, the people said. Many semiconductor companies rely on Southeast Asian facilities for crucial manufacturing steps like packaging, the process of encasing chips for use in devices. - Bloomberg
Free Malaysia Today
6 hours ago
- Free Malaysia Today
Indonesia offers to cut duties on US goods to ‘near zero' in tariff talks
Indonesian state carrier Garuda will buy more Boeing planes as part of a US$34 billion pact. (AFP pic) JAKARTA : Indonesia has offered to cut duties on key imports from the US to 'near zero' and to buy US$500 million worth of US wheat as part of its tariff talks with Washington, its lead negotiator and a wheat industry association said today. Chief economics minister Airlangga Hartarto, who is Indonesia's lead negotiator, also confirmed that state carrier Garuda Indonesia would buy more Boeing planes as part of a US$34 billion pact with US partners due to be signed next week. Indonesia, which ran a goods trade surplus of US$17.9 billion with the US in 2024 according to the US trade representative, is facing a 32% tariff in US markets and has proposed increasing US imports to facilitate trade talks between the two sides. Airlangga said the Indonesian government has offered to cut tariffs on key American exports, including agricultural products, to near-zero from between 0% and 5% at present. 'It will be near zero (tariffs for US main exports), but it will depend as well on how much the tariffs we get from the US,' Airlangga said. Garuda's CEO has said it is in discussions with US Boeing to buy up to 75 units of aircraft. Garuda group did not respond to requests for comment today. The wheat purchases are also part of next week's pact with US partners. The chairman of Indonesia's wheat flour mills association, Franciscus Welirang, said its 'members will purchase 2 million tonnes in total through tenders with a competitive price.' 'The point is all of the members will buy US wheat,' Welirang, who is also a director at Indofood, told Reuters. The US counterparts in the wheat deal include Cargill, Bunge Global, Pacificor, Archer-Daniels-Midland, Columbia Grain International and United Grain Corporation, Welirang added. US exports to Indonesia include soybeans, petroleum gases and aircraft, Indonesian government data showed. When asked whether the trade talks include military deals, Airlangga said they were 'not part of the negotiation'. Susiwijono Moegiarso, a senior official with Indonesia's coordinating ministry for economic affairs, told Reuters that in return, Jakarta has asked the US for preferential tariffs on its main exports, including electronics, textiles and footwear. 'We want them to lower the tariffs (for those goods) as low as possible,' he said. Indonesia has also offered the US opportunities to invest in critical minerals projects, including in the country's abundant resources of copper, nickel and bauxite.
The Star
6 hours ago
- The Star
Ringgit rebounds slightly as market anticipates mild US tariffs
KUALA LUMPUR: The ringgit ended marginally higher against the US dollar today, buoyed by growing expectations of a possible compromise on upcoming US tariff measures. At 6 pm, the local note appreciated to 4.2180/2260 against the greenback from Thursday's close of 4.2195/2255. Bank Muamalat Malaysia Bhd chief economist Dr Mohd Afzanizam Abdul Rashid said the modest rebound was partly driven by optimism that Washington may settle on a softer set of tariffs as it nears the finalisation of tariffs for selected countries. "There is speculation that the finalised tariffs could be less severe than the initial proposals announced in early April, which has helped ease some market concerns. "The ringgit was weaker earlier in the session, slipping to 4.2383, but later recovered to as high as 4.2175 during today's session,' he told Bernama. Nonetheless, Mohd Afzanizam noted that overall sentiment remained cautious, with investors staying on the sidelines as they await greater clarity on trade policy directions and their broader implications. At the close, the ringgit traded higher against a basket of major currencies. It rose against the euro to 4.9675/9770 from 4.9756/9827, appreciated against the Japanese yen to 2.9225/9282 from 2.9333/9376, and advanced versus the British pound to 5.7601/7710 from 5.7621/7703 yesterday. The local note traded mixed against its ASEAN counterparts. It improved vis-à-vis the Singapore dollar to 3.3114/3182 from 3.3146/3196, and rose against the Philippine peso to 7.47/7.49 from 7.50/7.51. However, it slipped against the Thai baht to 13.0302/0609 from 13.0211/0457, and shed against the Indonesian rupiah to 260.6/261.2 from 260.5/261.0 previously. - Bernama
