Indonesia Responds to U.S. Tariffs with Five-Point Policy Reform Plan

TEMPO.CO, Jakarta - The Indonesian government will reform several regulations to respond to the reciprocal tariff policy from the United States. The plan includes revising the Domestic Component Level (TKDN) rules and changing import license policies and quotas.

Coordinating Minister for Economic Affairs Airlangga Hartarto stated that the government has formed a deregulation task force to finalize this step.

"All task forces have started operating, we just have to wait for the formation target," said Airlangga on Wednesday, April 30, 2025.

Secretary of the Coordinating Ministry for Economic Affairs Susiwijono Moegiarso emphasized that the government is not only responding to the United States policy, but also using this momentum to improve the national regulatory structure.

"Deregulation covers everything, not just local content. Import licenses, quotas; we are rearranging everything. We call it reform, we are using this moment not only to respond to the U.S., but also for national improvement," said Susi.

So, what regulations will the Indonesian government change? Here is a summary:

1. Revision of the Domestic Component Level (TKDN) Obligations

Airlangga previously mentioned that one of the Deregulation Task Force's responsibilities is to handle the Domestic Component Level (TKDN) policy, which is planned to be relaxed or made flexible, especially in the information, communication, and technology (ICT) sector.

2. Adjustment of import duties for U.S. products

The step to adjust import duties for selective U.S. products was previously mentioned by Finance Minister Sri Mulyani Indrawati in a press conference following the periodic meeting of the Financial System Stability Committee (KSSK).

The import duty rates previously mentioned as a trade barrier complained about by the U.S. were included in the 2025 National Trade Estimate (NTE) Report on Foreign Trade Barriers published by the United States Trade Representative (USTR).

3. Deregulation of technical regulations and revision of import quota licenses

This plan was also mentioned by Sri Mulyani as a negotiation step. Previously, President Prabowo Subianto requested the elimination of technical regulations (teknis) which are derivative rules in ministries, especially related to import quota permits.

4. Reform of tax and customs administration

The government will reform tax and customs administration rules to facilitate entrepreneurs. Through simplification, it is expected to reduce the burden on entrepreneurs affected by reciprocal tariffs.

5. Reform of trade remedies regulations

The government will prepare trade remedies policies to tackle the flood of imported goods in the form of traded remedies.

Trade remedies are actions allowed by the World Trade Organization (WTO) for member countries to protect domestic industries from unfair trade practices or harmful import surges.

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