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Indonesia says zero-tariff US farm imports won’t hurt local industry

Jakarta (ANTARA) – Trade Minister Budi Santoso has defended the government’s decision to implement zero-tariff imports on U.S. agricultural products, asserting that the move will not jeopardize domestic industries. He emphasized that essential commodities, including soybeans, wheat, and cotton, are critical raw materials that are not produced locally in sufficient quantities.“These commodities are primarily utilized as industrial raw materials,” Santoso said here Friday, adding that with the U.S. being Indonesia's largest source of soybeans and a major supplier of wheat, imposing trade barriers would only penalize domestic industries.The Minister explained that eliminating tariffs is a strategic move to suppress import costs and production expenses, ultimately ensuring consumer prices remain stable. Lowering the cost of raw materials translates to more affordable finished goods. Conversely, high input costs inevitably drive up food inflation, he noted.Soybeans and wheat are foundational to Indonesia’s food and beverage sector, serving as the primary ingredients for national staples such as tofu, tempeh, and instant noodles.The policy aims to secure a consistent supply chain, stabilize market prices, and foster industrial resilience.This measure is a key component of the Indonesia-US Agreement on Reciprocal Trade (ART), which establishes a zero percent tariff framework for specific agricultural goods to streamline bilateral trade flows.Coordinating Minister for Economic Affairs Airlangga Hartarto added that the policy is a vital safeguard for household purchasing power, preventing “inflationary shocks” on everyday food products.The agreement was formalized in Washington, D.C., on February 19 by President Prabowo Subianto and U.S. President Donald Trump. According to Cabinet Secretary Teddy Indra Wijaya, both leaders hailed the pact as a milestone for economic security and a catalyst for a “new golden era” in the U.S.-Indonesia strategic partnership.