Indonesia offers to cut duties on US goods, buy $500 million of wheat in tariff talks

By Stefanno Sulaiman and Ananda Teresia

JAKARTA (Reuters) -Indonesia has offered to cut duties on key imports from the United States to "near zero" and to buy $500 million worth of U.S. wheat as part of its tariff talks with Washington, its lead negotiator and a wheat industry association said on Friday.

Chief economics minister Airlangga Hartarto, who is Indonesia’s lead negotiator, also confirmed that state carrier Garuda Indonesia would buy more Boeing (NYSE:BA) planes as part of a $34 billion pact with U.S. partners due to be signed next week.

Indonesia, which ran a goods trade surplus of $17.9 billion with the United States in 2024 according to the U.S. Trade Representative, is facing a 32% tariff in U.S. markets and has proposed increasing U.S. imports to facilitate trade talks between the two sides.

Airlangga said the Indonesian government has offered to cut tariffs on key American exports, including agricultural products, to near-zero from between 0% and 5% at present.

"It will be near zero (tariffs for U.S. main exports), but it will depend as well on how much the tariffs we get from the U.S.," Airlangga said.

Garuda’s CEO has said it is in discussions with U.S. Boeing to buy up to 75 units of aircraft. Garuda group did not respond to requests for comment on Friday.

The wheat purchases are also part of next week’s pact with U.S. partners.

The chairman of Indonesia’s wheat flour mills association, Franciscus Welirang, said its "members will purchase two million tons in total through tenders with a competitive price."

"The point is all of the members will buy U.S. wheat," Welirang, who is also a director at Indofood, told Reuters.

The U.S. counterparts in the wheat deal include Cargill, Bunge (NYSE:BG) Global SA, Pacificor, Archer-Daniels-Midland, Columbia Grain International, and United Grain Corporation, Welirang added.

U.S. exports to Indonesia include soybeans, petroleum gases and aircraft, Indonesian government data showed.

When asked whether the trade talks include military deals, Airlangga said they were "not part of the negotiation".

Susiwijono Moegiarso, a senior official with Indonesia’s Coordinating Ministry for Economic Affairs, told Reuters that in return, Jakarta has asked the United States for preferential tariffs on its main exports, including electronics, textiles and footwear.

"We want them to lower the tariffs (for those goods) as low as possible," he said.

Indonesia has also offered the United States opportunities to invest in critical minerals projects, including in the country’s abundant resources of copper, nickel and bauxite.