Indonesia’s ongoing trade tariff negotiations with the United States have been temporarily suspended following the U.S. government shutdown, Coordinating Minister for Economic Affairs Airlangga Hartarto confirmed on Tuesday, October 7, 2025.

“We are currently in the process of negotiating the draft agreement, but since the U.S. government is under shutdown, the negotiations and legal drafting have also come to a halt,” Airlangga said during Permata Bank’s Wealth Wisdom 2025 event in Jakarta.

He cited that one of the key points in the talks involves tariff exemptions or reductions of up to 19 percent for several Indonesian export products, including palm oil.

“If Indonesia receives a 19 percent tariff reduction, it will significantly benefit around five million workers in the textile, furniture, garment, footwear, and food industries, as exports to the U.S. will become more competitive,” he noted.

Airlangga said his ministry is monitoring the situation in Washington closely and will wait to see how long the shutdown lasts before resuming the legal drafting process.

The government had initially targeted October 2025 to finalize a reciprocal tariff agreement with the U.S., which would lower Indonesia’s import tariff rate from 32 percent to 19 percent.

The U.S. federal government shutdown, which began on Wednesday, October 1, 2025 marks the first closure in nearly seven years. The impasse arose after Republicans and Democrats failed to reach a budget deal, mainly due to disputes over funding for health insurance subsidies under the Affordable Care Act (ACA), commonly known as Obamacare.

President Donald Trump’s Republican Party failed to secure the required 60 Senate votes needed to pass the spending bill without Democratic support. Democrats, meanwhile, demanded an extension of ACA subsidies, opposed Medicaid cuts, and resisted budget reductions for key health agencies such as the Centers for Disease Control and Prevention (CDC) and the National Institutes of Health (NIH).

Despite two rounds of negotiations between Trump and congressional leaders on September 29 and two proposed funding bills on September 30, the efforts failed to produce an agreement. As a result, the federal government officially ran out of funds at 12:01 a.m. on October 1, 2025, forcing a partial shutdown of government operations.