Abdul Rahman Farisi: Indonesia-US Agreement to Drive 8 Percent Growth and Downstream Industrialization
REPUBLIKA.CO.ID, JAKARTA — Secretary of the Economic Policy Division of the Golkar Party, Abdul Rahman Farisi, stated that the bilateral diplomacy between Indonesia and the United States should be viewed holistically, considering both its risks and opportunities for the national economy.
According to Abdul Rahman, every economic policy has unavoidable consequences.
“No policy is perfect. Every choice has its benefits and drawbacks,” he said in Jakarta, Wednesday (February 25, 2026).
Therefore, he believes that criticism of the trade agreement is normal in a democracy, as long as it remains rational and data-driven. “Saying that this agreement is like handing over one’s head to be chopped off is too hyperbolic,” he stressed.
Furthermore, Abdul Rahman explained that the government’s swift response cannot be separated from the 32 percent reciprocal tariff policy previously imposed by US President Donald Trump on Indonesian export goods. This policy has the potential to put pressure on the national industry, given that the United States is Indonesia’s second-largest export destination after China, contributing approximately 10-12 percent to total exports.
He emphasized that the affected commodities are not small sectors, but rather labor-intensive manufacturing industries such as textiles, footwear, electronics, and rubber.
“It is reasonable for Indonesia to react to the 32 percent tariff, because it directly impacts the manufacturing industry and labor,” he said.
According to him, even though the import duties are paid by importers in the US, the price pressure will be passed on to Indonesian producers. “US importers do pay the import duties, but they can put pressure on prices for our industry. If they are not competitive, they will move to other countries. In the end, workers will be affected,” explained the former lecturer at the Faculty of Economics and Business at Hasanuddin University.
Based on these considerations, the government chose the path of negotiation. As a result, the general tariff was successfully reduced to 19 percent, and 1,819 Indonesian commodities received duty-free facilities, including palm oil, cocoa, coffee, electronics, aircraft components, textiles, and garments. Abdul Rahman expressed his appreciation to President Prabowo Subianto and the economic delegation team for this achievement.
“Every one percent reduction in tariffs means saving the industry and hundreds of thousands of workers,” he said.
As part of the reciprocal agreement, Indonesia also eliminated tariffs on more than 99 percent of US products, including agriculture, automotive, health, chemicals, and digital technology. Abdul Rahman views this policy as part of an effort to open up reciprocal market access.
“This shows that both countries have good intentions to open up markets and obtain trade benefits,” he said.
However, he reminded that risks still exist, especially for industries that must compete directly with US products.
“Risks certainly exist, including the potential pressure on local industries such as digital technology. But overall, the opportunities for exports and surplus remain open,” he stressed.
He noted that in 2025, Indonesia’s exports to the US reached approximately USD 30 billion with a surplus of approximately USD 19 billion, indicating that Indonesia’s position is still relatively strong.
In addition to the tariff issue, Abdul Rahman also highlighted the investment commitments generated in the bilateral meeting on February 19, especially in the energy and mineral resources sectors. The energy sector delegation was led by Minister of Energy and Mineral Resources Bahlil Lahadalia. Indonesia received investment plans from the US worth USD 7-9 billion to support downstream mining, including the construction of three smelters, two battery factories, and one electric vehicle facility.
According to him, the realization of this investment has the potential to increase the added value of the mining sector by two to three times, with a priority of absorbing 80 percent of local labor.
“If downstreaming is achieved, it will not only lead to industrial leaps, but the target of 8 percent growth is not impossible,” he said.
In conclusion, Abdul Rahman affirmed that in order to drive economic growth above 5 percent, Indonesia cannot rely solely on household consumption and government spending, which have a relatively limited contribution to GDP.
“The key lies in the private sector. Investment must be increased so that our economy can move up a level,” he concluded.
The Golkar Party’s Economic Policy Division, according to Abdul Rahman, has expressed its commitment to continue monitoring the implementation of the trade agreement and the realization of this investment to ensure that it has a real impact on the national industry, labor, and sustainable economic growth.