By: Rivka Mayangsari*)
Amidst the increasingly protectionist global trade turmoil, especially due to the aggressive tariff policies of the United States under President Trump’s leadership, the Indonesian government has not remained silent. This country has swiftly and strategically formulated various anticipatory steps to protect the national economy while strengthening Indonesia’s position in the international trade arena.
The National Economic Council (DEN), as a strategic institution that is always at the forefront of providing policy input, has submitted a series of concrete recommendations to the government to deal with the potential implementation of reciprocal tariffs by the United States on Indonesia’s leading export products. This recommendation is not a spontaneous reaction, but rather a proactive response to the increasingly challenging global dynamics and the strengthening protectionist tendencies of Uncle Sam’s country.
The Chairman of the National Economic Council (DEN) Luhut Binsar Pandjaitan assessed that Indonesia’s readiness to face reciprocal policies from the US must be carried out in detail, measured, and with great caution. The government is encouraged to immediately identify the export sectors that are most vulnerable to the impact, as well as prepare adjustment policies to ensure equality in bilateral trade relations.
In addition, DEN also pays special attention to non-tariff barriers that have so far limited the entry of products from the United States into Indonesia. Barrier-reducing measures such as easing limited bans and simplifying technical regulations are important strategies to strengthen Indonesia’s bargaining position at the negotiating table.
Coordination across ministries and institutions is key in responding to Trump’s tariff policy. DEN strongly recommends that the government form a cross-sector team tasked with analyzing the details of the tariffs imposed by the US, examining the basis for their considerations, and formulating a counter-strategy that is not reckless, but in accordance with national interests.
In line with DEN’s recommendations, the Coordinating Ministry for Economic Affairs is also moving quickly. The government has confirmed that in the near future it will immediately calculate the impact of the imposition of US tariffs on various sectors in Indonesia. The main goal is to protect national economic stability and provide a safe space for business actors to remain able to survive amidst the storm of global protectionism.
Together with Bank Indonesia (BI), the government also ensures that the stability of the Rupiah exchange rate is maintained and the availability of foreign exchange liquidity is sufficient to meet export-import needs. This close collaboration is the main shield in maintaining investor confidence amidst global economic uncertainty.
This anticipatory step did not come suddenly. Since early 2025, the government has prepared various strategies and scenarios to face potential tariff policies from the United States. Through intensive coordination between cross-ministerial teams, Indonesian representatives in Washington DC, and national business actors, Indonesia has shown its readiness to face every global dynamic.
President Prabowo himself has given firm instructions to the Red and White Cabinet to accelerate policy reform, both in terms of regulations and practices in the field. This reform is focused on simplifying regulations and eliminating non-tariff barriers (Non-Tariff Measures/NTMs) which have so far been considered to hinder the flow of trade and investment.
Not only at the bilateral level, Indonesia has also shown its leadership in the region. The government is actively encouraging ASEAN solidarity in facing global trade pressures triggered by US tariff policies. Indonesia has established intensive communication with Malaysia, which currently holds the position of ASEAN Chair, so that the ten countries in Southeast Asia can act unitedly and speak with one voice. This collective approach is believed to strengthen ASEAN’s bargaining position while creating regional stability.
From the private sector and market analyst side, Bank Permata Chief Economist, Josua Pardede, views the government’s move to avoid direct confrontation as a wise decision. According to him, rather than responding with a similar tariff policy, Indonesia would be better off taking advantage of the opportunity to expand its export market, especially to non-traditional countries that offer lower tariff preferences.
Josua assessed that labor-intensive sectors such as apparel and footwear are real examples where Indonesia can be more aggressive in penetrating new markets, given the high competitiveness of national products and their tariff preferences.
In addition, Josua also underlined the importance of long-term steps that must be taken by the government. Starting from providing fiscal incentives for labor-intensive industries, easy access to raw materials, to financing that supports national productivity. The government is also encouraged to accelerate the implementation of variousinternational trade agreements such as CPTPP, RCEP, EU-CEPA, and BRICS+ to expand global market access while reducing dependence on the United States market.
In facing this global challenge, economic diplomacy is one of Indonesia’s main weapons. By continuing to pursue dialogue within a multilateral framework such as the Trade and Investment Framework Agreement (TIFA), Indonesia has proven its commitment to building a fair, stable, and mutually beneficial global trading system.
With a spirit of mutual cooperation, a measurable strategy, and visionary leadership, Indonesia is ready to face the challenges of Trump’s tariff policy. The government not only protects national economic interests, but also ensures that Indonesia continues to move forward as a strong and respected economic power on the global stage.
*) Economic observer
