IBC Urges Strategic Trade Response to US Tariffs, Eyes New Market Alliances

JAKARTA, investortrust.id – Indonesia’s top business leaders have called for urgent diplomatic and structural actions to cushion the impact of the United States' newly imposed tariffs on Indonesian exports and to maintain long-term trade stability.

The Indonesian Business Council, a high-level forum of CEOs and industry leaders, issued a four-point proposal this week in response to Washington’s announcement of a 32 percent reciprocal tariff on Indonesian goods. The policy, unveiled by US President Donald Trump, affects a market that absorbed $38.7 billion in Indonesian exports in 2024, significantly threatening the competitiveness of the country’s products in one of its largest trading destinations.

In a statement from Jakarta, Chief Executive Officer of IBC Sofyan Djalil urged the Indonesian government to immediately launch negotiations with US counterparts and expand bilateral and multilateral free trade agreements to open access to new markets and reduce overreliance on any single trade partner.

“IBC proposes strategic mitigation efforts to protect the economy and national trade performance from the negative impacts of these tariffs,” said Sofyan. “We are also calling for tariff renegotiations and the expansion of free trade agreements with new partner countries and regions.”

IBC outlined four specific policy recommendations. First, the government should prioritize macroeconomic stability and provide support to affected industries, especially micro, small, and medium enterprises (MSMEs) that are integrated into export supply chains. This includes creating a more business-friendly regulatory environment and accelerating structural reforms to boost productivity and export competitiveness.

Second, Indonesia must pursue bilateral negotiations with the United States and review the current trade agreement framework to push for a fairer and more balanced tariff regime. Beyond maintaining existing trade flows, IBC emphasized the importance of strengthening trade diplomacy.

Third, the council encouraged Indonesia to lead multilateral trade negotiations through ASEAN, advocating for a more equitable global trade order. Given the bloc’s significance as a regional trade partner, both the US and ASEAN could benefit more from cooperative trade arrangements than from unilateral tariff actions.

Fourth, IBC pressed the government to finalize and expand bilateral and multilateral trade agreements currently under negotiation. Such deals, the group argues, would unlock new export opportunities and mitigate exposure to single-market risks.

Chairman of IBC’s Supervisory Board Arsjad Rasjid highlighted that the current trade tensions could be turned into an opportunity for Indonesia to strengthen its role in the shifting global supply chain landscape.

“We view this challenge as a catalyst to accelerate structural reforms, diversify export markets, and boost value-added industries,” he said. “Improving ease of doing business is essential to raise Indonesia’s global competitiveness.”

The US trade action, while not targeting Indonesia alone, is seen as a potentially destabilizing force in global trade dynamics. According to the Ministry of Trade, the US accounted for a substantial share of Indonesia’s non-oil-and-gas trade surplus in 2024, amounting to $16.08 billion out of a total $31.04 billion.

Indonesia’s key exports to the US include garments, electrical appliances, footwear, and vegetable oil—sectors that are now directly impacted by the 32 percent tariff hike.

Founded in February 2023, the Indonesian Business Council (IBC) is a coalition of CEOs and senior industry leaders committed to strengthening Indonesia’s competitiveness and promoting private sector contributions to national development. IBC formulates research-based policy recommendations supported by insights from its members.