News / US-Indonesia trade deal good news for shippers

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A possible trade deal between Indonesia and the US has offered a rare bright spot for shippers battered by months of tariff uncertainty.

But for freight forwarders, the agreement is another reminder of the breakneck pace that geopolitical change is reshaping global trade. 

Speaking to The Loadstar on the sidelines of Manifest last week, Seko Logistics chief commercial officer Brian Bourke said the biggest challenge for forwarders today was protectionism. and the speed at which rules are rewritten. 

“The biggest challenge is probably still geopolitical risk and protectionism,” he said. “But it’s really the pace of change… across multiple continents, multiple tradelanes, and around de minimis and duties in multiple countries. That’s hard to keep up with.” 

But he added that for forwarders, this also made way for opportunity. He said when Brexit hit, forwarders with direct customs connectivity gained market share, while others scrambled, and Mr Bourke believes the same dynamic is playing out today. 

Yesterday, the White House released a fact sheet detailing a “finalised trade deal” with Indonesia. However, while the deal appears ironed out, it cannot be deemed official until submitted as an executive order. 

The reciprocal trade agreement eliminates tariffs on more than 99% of US exports to Indonesia, and also addresses a wide range of non-tariff barriers. Indonesia will recognise US emission and safety standards in areas such as automotive and pharmaceuticals, ease agricultural import restrictions, remove digital trade barriers, and join efforts to tackle steel overcapacity. 

The deal includes $33bn of commercial commitments, including $15bn of US energy purchases, $13.5bn for commercial aircraft and aviation goods and services, including from Boeing, and $4.5bn in US agricultural products. The US will maintain a 19% tariff on Indonesian imports, but with certain products eligible for 0%.  

“A quota mechanism will allow specified volumes of Indonesian textiles and apparel to enter at 0%, linked to US textile input exports,” saya the fact sheet.  

And, according to the sheet, the US and Indonesia will “undertake applicable domestic procedures” to make the agreement effective “in the coming weeks”.  

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