Purbaya confident US trade investigation will not hamper Indonesia's prospects

Jakarta — Indonesia’s Finance Minister Purbaya Yudhi Sadewa has expressed optimism that a trade investigation being conducted by the Office of the US Trade Representative (USTR) will not disrupt Indonesia’s trading prospects.

Purbaya regards the investigation as a routine matter in international trade relations and therefore is not taking any further stance on the inquiry.

“I think it’s fine (the trade investigation). Investigation is a common thing,” Purbaya told journalists at the Finance Ministry office in Jakarta on Friday.

According to the Finance Minister, Indonesia still possesses relative advantages in trade with the United States, particularly because Indonesian goods are more competitively priced compared to American products.

This condition is further supported by lower labour costs, which gives Indonesia a distinct competitive advantage.

Regarding potential tariff increases often linked to a country’s trade surplus status with the US, Purbaya stated that Indonesia will not be significantly affected if tariff increases are applied equally with other countries.

However, the situation would be different if tariffs imposed on Indonesia are higher than those on peer countries. A significant tariff differential, for example up to 10 per cent, could potentially place pressure on Indonesia’s trade.

Nevertheless, the Finance Minister assured that the government is ready to implement efficiency measures if necessary.

The US administration launched a trade investigation on Wednesday, 11 March, into alleged unfair trade practices by Indonesia, Japan, and dozens of other trading partners, following the US Supreme Court’s removal of high import tariff policies.

US Trade Representative Jamieson Greer stated that the investigation is to uncover “a range of unfair trade practices related to overcapacity and manufacturing production” in order to establish new high import tariffs.