Trump’s 32% Tariff on Indonesian Exports Opens Door to High-Stakes Trade Talks

JAKARTA, Investortrust.id — United States President Donald Trump has imposed a 32% retaliatory tariff on Indonesian exports, labeling the country as one of 50 that benefit unfairly from bilateral trade. The measure, announced on Wednesday, April 2, during what Trump called America’s “Liberation Day,” risks escalating trade tensions between the two nations.

Indonesia’s top business leader, however, remains hopeful. Anindya Novyan Bakrie, Chairman of the Indonesian Chamber of Commerce and Industry, or Kadin Indonesia, said the decision should be viewed as a starting point for negotiations rather than a final blow to trade relations.

“America is a strategic business partner for Indonesia, and the two countries share a mutually beneficial relationship. I believe this move by President Trump is an opening statement — the door to negotiation remains open,” Anindya said in a written statement on Thursday, April 3.

Indonesia’s Strategic Position and Diplomatic Leverage

Anindya emphasized Indonesia’s vital geopolitical role in the Pacific, its leadership in the Association of Southeast Asian Nations (ASEAN), and its participation in the Asia-Pacific Economic Cooperation (APEC) forum as strategic assets in upcoming trade talks. He voiced support for Indonesia’s government, which is preparing diplomatic channels and a high-level delegation to Washington, D.C., to address the new tariff regime.

He also praised early efforts by the government to coordinate with Malaysia, which holds the ASEAN chairmanship this year, to formulate a collective response. All ten ASEAN member states are affected by the US tariff policy.

Strengthening US-Indonesia Business Ties

Kadin plans to intensify cooperation with regional partners through the APEC Business Advisory Council and will leverage its longstanding relationship with the US Chamber of Commerce to assist the Indonesian government.

During President Prabowo Subianto’s visit to Washington in November 2024, Kadin had already begun laying the groundwork for closer business-to-business engagement with US counterparts. Kadin is expected to return to the United States in early May to build upon these discussions and attend economic forums aimed at navigating the post-tariff landscape.

Anindya warned that if implemented, the 32% tariff would significantly impact Indonesia’s balance of payments, especially trade and investment flows. The US was Indonesia’s largest bilateral trade partner in 2024, generating a surplus of $16.8 billion. Most of Indonesia’s exports to the US are manufactured goods, including electronics, footwear, and apparel.

Trade Preferences and the Case for Fair Treatment

Currently, many Indonesian products enjoy duty-free access to the US under the Generalized System of Preferences (GSP), which grants favorable terms to developing countries. Most items are subject to tariffs around 10%, while some consumer goods face no duties at all.

To maintain export competitiveness, Anindya urged selective trade negotiations focusing on labor-intensive industries. He also encouraged diversification of export markets beyond the Asia-Pacific region, targeting Central Asia, Turkey, Europe, Africa, and Latin America.

Anindya argued that Indonesia remains an attractive market for US goods, particularly defense equipment, aircraft, and liquefied natural gas. He urged the government to engage with the US using key Indonesian exports — including processed nickel and other critical minerals — as bargaining chips, particularly under the provisions of the US Inflation Reduction Act (IRA). The IRA offers subsidies for clean energy imports that meet environmental and labor standards, potentially creating new opportunities for Indonesian products.

Navigating Policy Risks and Counterclaims

The tariff move follows allegations in the 2025 National Trade Estimate Report on Foreign Trade Barriers by the Office of the US Trade Representative, which accuses Indonesia of unfair trade practices. These include the progressive increase of import tariffs over the past decade, complicated tax audits, higher duties on foreign alcoholic beverages, and restrictive licensing for 19 imported commodities under Presidential Regulation No. 61 of 2024.

Indonesia, according to the report, now imposes tariffs on US products that cumulatively reach up to 64%. Anindya called for thorough verification of these claims and supported the formation of a special task force for trade clarification and negotiations.

 

Structural Reforms and Investor Confidence

Kadin welcomed President Prabowo Subianto’s decision to instruct his Red and White Cabinet to launch a new economic policy package focused on deregulation, aiming to eliminate non-tariff barriers and improve the investment climate.

Anindya stressed that this is a crucial moment to enhance competitiveness, protect market confidence, and secure both domestic and foreign investment. He called on the central bank, financial services regulator, and business community to work together in safeguarding market trust and the rupiah’s stability.

“Trump’s sledgehammer approach should serve as a wake-up call for Indonesia. Now is the time to address the high cost economy, which is reflected in our ICOR remaining above 6% — far from the ideal 4%,” Anindya concluded.