Indonesia uses Airbus orders as tariff leverage

August 23rd 2019

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Indonesia has increased the stakes in its tariff standoff with the European Union (EU). After the EU imposed tariffs ranging from 8%-18% on subsidised Indonesian biodiesel last week, Indonesia threatened retaliatory tariffs on dairy products from the EU. This week, trade minister, Enggartiasto Lukita, said he wanted Indonesian carriers to stop buying Airbus aircraft and instead purchase from Boeing.

“I have contacted Rusdi. He said the airline will follow whatever the government decides,” Lukita said of Lion Air co-founder, Rusdi Kirana. Rusdi had mooted switching from Boeing to Airbus in the fallout following the deadly crash of Lion Air 737 MAX flight JT610 last year.

An Airbus spokesperson did not return a Bloomberg request for comment.