Indonesian Exporters See Silver Lining in Trump’s Tariff Hike

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JAKARTA, investortrust.id – Despite the imposition of a 32% import tariff by the United States on Indonesian products, business leaders across Indonesia are responding with optimism and determination. Exporters see the challenge not as a setback, but as an opportunity to reposition Indonesian goods on the global stage, enhance competitiveness, and pursue stronger trade diplomacy.

Chairman of the Indonesian Exporters Association, GPEI, Benny Soetrisno, acknowledged the short-term risks to export volumes, but emphasized the potential for Indonesia to capture greater market share if the country responds strategically.

“There will be adjustments in our trade volumes with the US, but this is also a chance to strengthen our position against competitors,” Benny said on Thursday, April 3, 2025. “If we remain competitive compared to countries also facing tariffs, US buyers may still prefer Indonesian products.”

According to Benny, several of America’s key trading partners are also being hit with high tariffs. China now faces a 34% rate, Vietnam 46%, Sri Lanka 44%, Bangladesh 37%, Thailand 36%, Taiwan 32%, and Cambodia 49%. These across-the-board hikes open space for Indonesia to remain attractive to US importers, especially if swift policy measures are taken.

“We must assess our relative position. If we act fast, this could be an opportunity rather than a crisis,” Benny said, adding that diplomatic engagement with the US must be prioritized to ease trade flows.

Turning Headwinds into Momentum

Economist Didin S Damanhuri from the Bogor Agricultural Institute, IPB, supported the exporters’ call for government intervention and urged immediate, bold action to protect the economy and seize new opportunities.

“The government must redirect funding from long-term development programs into a comprehensive stimulus package to support business players—especially MSMEs—and strengthen the domestic market,” Didin said.

He emphasized that tighter control over state spending, realignment of national development goals, and prioritization of export-oriented industries could serve as a powerful response to global shifts. Didin also encouraged the government to align President Prabowo Subianto’s Asta Cita development agenda with new global trade dynamics.

Beyond the economy, he highlighted the need for unity, calling on leaders and civil society to stop divisive rhetoric and consolidate political and social energy to face external pressures.

“We need national consolidation—economic, political, and social—to navigate the worst-case scenarios,” he stated.

 

Exporters Urge Focused Trade Diplomacy

As exporters brace for possible short-term contraction in shipments to the US, they are also urging Indonesian authorities to strengthen bilateral dialogue.

“Now is the time for serious trade lobbying. We must secure easier access and clearer terms with the US to protect our exporters,” Benny said.

The concern over competitiveness is particularly acute in sectors such as automotive, where ASEAN neighbors are gaining ground. Jongkie D Sugiarto, Vice Chairman of the Association of Indonesian Automotive Manufacturers, Gaikindo, urged vigilance amid rising regional competition.

“We must strengthen Indonesia’s automotive industry so it competes globally. Thailand, Malaysia, and Vietnam are advancing fast—we need to act,” he said.

Thailand’s auto sector is valued at $12.67 billion and ranks 10th globally, producing 2.55 million units in 2023. Vietnam's car market is also expanding, with sales projected to hit 600,000 units in 2025.

Avoiding Economic Fallout Through Unity and Policy Action

While acknowledging the risks—ranging from currency depreciation to job losses—Didin urged Indonesians to respond with solidarity rather than despair. He encouraged consumers to prioritize essential spending and communities to support each other.

“No one should be left to struggle alone,” he said. “We need political, economic, and social consolidation to get through even the worst-case scenario.”

The rupiah has already weakened to Rp 16,700 per US dollar and could surpass Rp 17,000 in the coming days. Didin also warned of potential mass layoffs among dollar-exposed industries and declining tax revenue, which already dropped 30% as of February.

Nonetheless, he believes timely intervention can prevent broader economic fallout. “We must be proactive—on security, on public sentiment, on business. If we act swiftly and wisely, we can turn this disruption into a reset,” he said.

What’s at Stake: Key Exports and US Concerns

Indonesia currently exports 22 main product categories to the US, including footwear, cocoa, coffee, palm oil, processed food, herbal medicine, and automotive parts. The US, meanwhile, raised concerns over rising Indonesian tariffs on electronics, cosmetics, pharmaceuticals, alcoholic beverages, and various agricultural items.

According to Benny Soetrisno, staying competitive will depend on rapid response and agile diplomacy. “If we stay ahead in quality and price—and if our government fights for better terms—then we’re not out of the race. We might even come out stronger.”