Jakarta confronts 32% reciprocal tariff on key exports as Prabowo pushes national strategy
Indonesia has dispatched a high-level delegation to Washington DC to negotiate a looming US tariff hike that threatens to disrupt key export sectors and destabilize the national economy.
On April 9, 2025, the US will impose a 32% reciprocal tariff on Indonesian goods, based on former President Donald Trump’s revived trade framework. The move could severely impact Indonesia’s major exports to the US—ranging from electronics and textiles to palm oil and fisheries—prompting Jakarta to engage in urgent diplomacy.
The Indonesian Ministry of Foreign Affairs confirmed that the new US tariff includes a universal base rate of 10%, with Indonesia subject to a heightened 32% due to ‘reciprocal adjustments.’ This will most significantly impact export-reliant industries such as footwear, furniture, rubber, and seafood—many of which support tens of thousands of jobs across small and medium enterprises (SMEs). The Foreign Ministry emphasized that the tariff would reduce Indonesia’s competitiveness in the US market, sparking a potential domino effect on domestic employment and industrial growth.
In response, Jakarta is pursuing multiple channels of negotiation. A delegation has been deployed to Washington for direct talks, while inter-ministerial coordination continues to assess and mitigate sectoral damage. The Prabowo administration has prioritized regulatory reform to address non-tariff barriers flagged in the 2025 US National Trade Estimate (NTE). These reforms include deregulation measures and transparency boosts to strengthen Indonesia’s attractiveness to global investors.
The Presidential Communication Office (PCO) also laid out three strategic pillars: expanding export markets, accelerating natural resource downstreaming, and bolstering domestic consumption. Prabowo’s BRICS bid and engagement with trade pacts like RCEP, CPTPP, and IEU-CEPA represent Jakarta’s push to diversify trade partnerships. Meanwhile, a new investment agency—BPI Danantara—has been tasked with backing strategic projects in energy, marine, and agriculture sectors.
One of the more domestically focused policies is the “nutritious meals for all” program, set to benefit 82 million people by the end of 2025. Paired with the formation of 80,000 village cooperatives, the program is expected to stimulate household consumption, which currently makes up 54% of Indonesia’s GDP. These efforts aim to buffer the economy from external shocks and safeguard local industries.
Regionally, Indonesia is coordinating with Malaysia and other ASEAN members to prepare a unified response to the US trade action. As ASEAN Chair in 2025, Malaysia is working with Jakarta to formulate collective economic countermeasures, aiming to maintain Southeast Asia’s influence in international trade discussions.
The proposed US tariffs place Indonesia in a critical economic position, but the government’s swift diplomatic and structural response indicates a proactive shift in its global trade approach. Singaporean and regional stakeholders may find new opportunities as Indonesia reorients its strategies toward BRICS, ASEAN, and domestic resilience.
Sources: Pikiran Rakyat (2025), Detik.com (2025)
Keywords: Indonesia Export Policy, US Reciprocal Tariff, Prabowo Economic Strategy, Indonesia Trade Relations
