Government Ensures to Prevent Economic Weakening and Maintain Stability After Trump Tariff Announcement
By: Sahrul Mubarak A. *)
President Prabowo Subianto’s government responded to the 32% import tariff policy of US President Donald Trump with measured steps. This policy affects global trade, including Indonesian exports. The government’s focus is on strengthening the national economy through a coordinated strategy, maintaining stability without overreaction.
President Prabowo Subianto believes that Indonesia has the structural strength to overcome global economic turmoil. In his statement, President Prabowo emphasized that this nation has shown resilience in various major crises in the past, including the 1998 crisis, the 2008 global financial crisis, and the Covid-19 pandemic. This belief is the basis for the direction of government policy in responding to this new dynamic; namely by strengthening the economic foundation, strengthening social cohesion, and avoiding emotional responses.
Quick steps were taken through cross-ministerial coordination. The government submitted a concrete proposal to the United States Trade Representative (USTR), as an effort to bridge differences in interests and maintain the economic partnership that has been built so far. At the same time, an update to the Trade and Investment Framework Agreement (TIFA) is being sought to keep it relevant in the face of new challenges. This shows that the government is not only responding to the situation in the short term, but also directing policies towards the sustainability of healthy trade relations in the future.
One adaptive strategy being considered is the relaxation of the Domestic Component Level (TKDN) rules for information and communication technology products from the United States. Products from large companies such as Apple and Microsoft are an important part of the digital industry ecosystem in Indonesia. The government considers that flexibility in TKDN can be a temporary instrument to maintain the continuity and competitiveness of the national industry. This step still considers the sustainability of the use of local components, so that productivity is not sacrificed.
Deputy Minister of Industry Faisol Riza emphasized that the relaxation of TKDN is not a form of compromise on industrial independence, but rather a tactical adjustment based on sector needs. In global conditions full of uncertainty, this kind of strategy shows the government’s courage to take realistic policies, without ignoring the long-term agenda.
However, the government remains open to discussion of views from various groups, including academics and economists. Several parties are pushing for Indonesia to be more active in building regional alliances, especially through ASEAN. However, the government continues to prioritize direct diplomacy with the US, while expanding opportunities for cooperation with other regions.
The government’s efforts do not stop at the bilateral trade aspect. Domestically, strengthening the national economy is the main focus. Downstream industry, especially in the mineral and energy sectors, continues to be encouraged as one of the levers of export competitiveness. By increasing the added value of domestic products, the government hopes that exports will not only depend on raw commodities that are vulnerable to global price fluctuations.
Diversifying export markets is also part of the strategy to deal with US tariff policies. The government is encouraging penetration into regions such as East Asia, India, Latin America, and of course strengthening the market base within ASEAN. By expanding its reach, Indonesia is not only reducing dependence on one market, but also opening up new opportunities for local products.
The stability of the rupiah exchange rate is maintained by active steps from Bank Indonesia. Through intervention in the foreign exchange market and DNDF instruments, the monetary authority has shown readiness to respond to external pressures. With solid foreign exchange reserves and an increasingly sophisticated early detection system, Indonesia is in a much stronger position than in the previous crisis period.
On the other hand, the 90-day delay in the implementation of tariffs by the US government was used wisely by Indonesia. The government views this pause as a space to accelerate structural reforms, especially in cutting high economic costs and simplifying regulations that hinder investment. The government realizes that competitiveness is not only determined by tariffs, but also the efficiency of the domestic system.
The government also emphasizes the importance of providing incentives to industries that consistently use local components. This incentive will not only strengthen TKDN as a long-term principle, but also be a signal that Indonesia remains committed to strengthening the domestic industry.
The overall policies taken reflect the consistency of the government’s approach in maintaining a balance between international diplomacy and domestic resilience. The government does not seeTrump’s tariff policy as a permanent threat, but as a challenge that must be answered with smart and collaborative strategies.
President Prabowo invited the entire community to continue to believe in the nation’s ability to face this situation. The emphasis on mutual cooperation, calm in attitude, and hard work across sectors are the foundations of the government’s comprehensive approach. This firmness of attitude is not just a political response, but a reflection of the belief in national strength that has been tested by time.
With a combination of diplomatic steps, economic reform, and strengthening strategic sectors, the Indonesian nation will not only be able to maintain stability amidst global pressure, but can also use the crisis as a momentum to move forward.
*) Economic observer from the Pancasila Madani Institute
