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US fuel storage investment in Indonesia discussed

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Indonesia wants to attract investors into industrial parks

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Focus on silica sand processing for solar panels,

semiconductors

(Adds seeking comment, context and details in paragraph 5-6,

10-13)

By Stefanno Sulaiman and Gibran Naiyyar Peshimam

JAKARTA, Aug 26 (Reuters) - The United States has agreed

in principle to exempt Indonesian exports of cocoa, palm oil and

rubber from the 19% tariff imposed by President Donald Trump

since August 7, Indonesia's top trade negotiator said on

Tuesday.

The exemption will take effect once both sides reach a final

agreement, but no timeline has been set because the U.S. is busy

in tariff talks with other countries, Airlangga Hartarto, who is

also the chief economic minister, told Reuters.

The two countries also discussed potential U.S. investment

in fuel storage in Indonesia in partnership with the Southeast

Asian nation's sovereign wealth fund Danantara and state energy

firm Pertamina, Airlangga said in an interview.

"We are waiting for their response, but during the meeting,

basically, the principal (exemption) has been agreed for

products not produced in the U.S., such as palm oil and cocoa

and rubber ... it will be zero or close to zero," he added.

The U.S. embassy in Jakarta did not immediately respond to a

request for comment.

Indonesia is the world's biggest exporter of palm oil and a

major rubber supplier.

CERTAINTY ON TARIFFS

Indonesia, the region's largest economy, was among the first

nations to strike a tariff deal with Trump in July, but Jakarta

ended up facing the same rate as some other countries, such as

Thailand and Malaysia, and just below Vietnam's figure of 20%.

During the talks, Indonesia offered billions of dollars

worth of investment in the U.S. and purchases of American crude,

LPG, planes and farm products. It also promised zero tariffs on

almost all U.S. goods entering its market.

Airlangga said certainty over U.S. tariffs and recent

progress in talks about a free trade agreement with the European

Union could boost Indonesia's economic growth, helping the

government reach a 5.4% target for 2026, up from an estimate of

about 5% this year.

"They bring an optimistic perception from the global market

since most investors are looking for certainty and Indonesia is

one of the countries that provide global certainty," he said.

Jakarta wants to draw foreign investors to help develop

industrial facilities, particularly in the processing of its key

commodities, Airlangga said, replicating the success the country

has seen in bringing Chinese investment into nickel projects.

Airlangga said the government is also keen to boost

investment in silica sand processing, including the production

of solar panels and wafers for semiconductors.

(Editing by Gayatri Suroyo;

Editing by Clarence Fernandez and Helen Popper)