Deputy Minister of Industry: Indonesia-US Trade Agreement Represents Major Industrialisation Leap
Jakarta – Deputy Minister of Industry Faisol Riza has characterised the reciprocal trade agreement between the Republic of Indonesia and the United States as a major leap forward for national industrialisation.
According to him, the agreement represents a significant breakthrough by opening opportunities to accelerate national mineral downstream processing, which has previously faced various obstacles in terms of investment, technology, and market access.
“Until now, our mineral downstream processing has faced many challenges. With the Indonesia-United States trade agreement, downstream processing of silica sand as a primary material for chip or semiconductor production has the potential to be realised domestically. This is a major leap for Indonesia’s industrialisation,” he stated in remarks confirmed in Jakarta on Friday.
He further explained that silica sand is one of the important raw materials in the global semiconductor industry.
As a result of this cooperation, he noted that Indonesia has the potential to become one of the suppliers for US-based semiconductor companies whilst simultaneously increasing the value added of domestic natural resources.
Meanwhile, he emphasised that the agreement does not harm national industry, particularly small and medium-sized enterprises (SMEs).
He stated that the government, through this agreement, has ensured that domestic industry products are not placed in direct competition with US products in the domestic market.
Furthermore, he noted that 1,819 Indonesian products have obtained zero-percent tariff facilities to the US market. Prior to this agreement, these products were subject to tariffs between 8 and 12 percent.
“Industrial groups in textiles, wood furniture, rubber, and various SME products stand to benefit considerably. This is a major opportunity for export expansion and job creation,” he said.
He emphasised that President Prabowo Subianto’s strategy in this agreement reflects a balanced trade policy, namely opening US market access for Indonesian products whilst simultaneously protecting domestic industrial interests.
“This is not merely an ordinary trade agreement. This is part of a grand strategy to establish Indonesia as an important player in global supply chains, including high-technology industries such as semiconductors. We must view this as an opportunity, not a threat,” said the Deputy Minister of Industry.
The agreement will take effect 90 days after both countries provide written notification confirming that the legal procedures in their respective countries have been completed.
The agreement can be evaluated and amended at any time with a request and written approval from both parties.