JAKARTA – The Indonesian government is considered to need to optimize domestic mineral absorption in order to strengthen the manufacturing industry as a mitigating measure against the new United States tariff policy under the Donald Trump administration.
A researcher from the Institute for Development of Economics and Finance (INDEF), Ahmad Heri Firdaus, emphasized that Indonesia’s exports to the US have so far been dominated by palm oil, textiles, and footwear products. However, the continued effects of the tariffs could disrupt the global supply chain, including the mineral sector.
“World trade is like a spider’s web. If America is disrupted, Japan and China will also be affected, and finally Indonesia will be affected,” he said.
According to him, the government must accelerate the downstreaming of raw minerals so that value-added products such as car frames and exhausts can be produced domestically. This step is believed to create jobs, strengthen people’s purchasing power, and reduce imports of similar goods.
“China is our main trading partner in the base metal sector. If their exports to the US are disrupted, demand for our downstream products could also decrease. Therefore, we need to strengthen the domestic market,” he said.
Responding to this situation, Coordinating Minister for Economic Affairs, Airlangga Hartarto, stated that President Prabowo Subianto directed Indonesia to maintain strategic relations with the US. Currently, the Government is pushing for renegotiation of trade and investment agreements such as TIFA which was last revised in 1996.
“The agreement is no longer relevant. Even Malaysia is interested in establishing a similar agreement with Indonesia,” he said.
Airlangga also revealed various concrete steps, such as deregulation of Non-Tariff Measures, strengthening TKDN in the ICT sector, and opening access to the Free Trade Zone, especially in Batam, to support the entry of US company investment.
“We will also increase imports of agricultural products such as soybeans and wheat from the US as part of a balancing strategy. But this is a reallocation, not an addition, so it does not burden the APBN,” he added.
Meanwhile, the Governor of the National Resilience Institute (Lemhanas), Ace Hasan Syadzily, sees Trump’s tariff policy as a strategic momentum to strengthen national resilience.
“The world is starting to abandon free trade. We must have an independent economic foundation,” he said.
He encouraged downstreaming, strengthening local industries, and digital transformation to build economic independence and create quality jobs for future generations.
