The House of Representatives (DPR) has responded to U.S. President Donald Trump’s decision to impose a 32 percent import tariff on Indonesian products by urging the government to pursue strategic investment diplomacy, particularly by offering to establish manufacturing operations within the United States.

Chairman of the House Budget Committee, Said Abdullah, emphasized that the Indonesian government still has a window of opportunity to negotiate, referring to an official letter from President Trump to President Prabowo Subianto. The letter outlined that Indonesia could be exempted from the tariff hike if it agreed to build factories in the U.S.

"The government must come to the negotiating table with a more promising offer, such as allowing Indonesian companies to conduct manufacturing activities in the U.S.,” Said said as quoted in a statement on Thursday, July 10, 2025.

He added that another way to ease tensions would be to reduce Indonesia’s trade surplus with the U.S., which currently stands at around US$19 billion.

In his letter, dated July 7, 2025, Trump made clear that Indonesia could avoid the new tariffs altogether if its businesses committed to direct investment in American soil.

“There will be no tariffs if Indonesia or companies in Indonesia decide to build or manufacture products in the United States,” Trump wrote, adding that the permitting process would be fast-tracked and completed “within weeks” should Indonesia agree to invest.

However, Trump also issued a stern warning: if Indonesia retaliates with similar tariff measures, the U.S. would respond with an additional 32 percent tariff on top of the existing one. According to Trump, the measure is intended to correct what he sees as long-standing trade barriers imposed by Indonesia, which he claims have harmed U.S. economic and national security.

“This trade deficit is a serious threat to our economy and national security!” Trump declared in the letter.

The situation puts Indonesia in a difficult position − balancing its economic sovereignty and trade interests with the need to maintain diplomatic and commercial ties with one of its largest export markets.