Supporting Indonesia’s Economic Diplomacy in Facing Trump’s Import Tariffs
By: Rivka Mayangsari
Indonesia continues to assert its position as a resilient and independent country in facing global dynamics, including the protectionist import tariff policy that has been re-introduced by the President of the United States, Donald Trump. Amidst the uncertainty of the world market and the tendency of unilateral economic policies from several major countries, the Indonesian government is taking strategic and measured steps to protect national interests and encourage long-term growth.
Deputy Minister of Finance Suahasil Nazara said that Indonesia will not be trapped in short-term reactions. He explained that a long-term strategy has been designed with a focus on strengthening domestic economic resilience, especially in terms of household consumption and stable Gross Domestic Product (GDP) growth. He also added that consumption is the backbone of the national economy, supported by consistent GDP growth of around five percent each year.
Suahasil also emphasized that consistent growth and sustainable structural reform are Indonesia’s main weapons in facing unfriendly global policies. He emphasized the importance of national economic development that is oriented towards a medium- and long-term vision, because such steps are considered more effective than momentary responses to external shocks. In this case, economic diplomacy is called an important instrument to open up opportunities and strengthen internal resilience.
Concrete steps have also been shown through strengthening cooperation with strategic partners such as Japan. The Coordinating Minister for the Economy of the Republic of Indonesia, Airlangga Hartarto, said that amidst the heating up of the global trade war due to President Trump’s retaliatory tariff policy, Indonesia continues to strengthen bilateral relations. He explained that both Indonesia and Japan were affected by the United States’ high tariff policy, which previously imposed a tariff of 32 percent on Indonesia, while Japan imposed a tariff of 24 percent.
Airlangga explained that relations between Indonesia and Japan have been facilitated through more than 170 Memorandums of Understanding (MoUs), including strategic projects within the framework of the Asia Zero Emission Community (AZEC). He hopes that this cooperation can continue to be improved as an important buffer in facing global uncertainty, especially due to Trump’s challenging tariff policy, but which actually opens up opportunities to strengthen Indonesia’s strategic cooperation with other countries.
The Indonesian government also understands that Trump’s tariff policy not only has a direct impact on international trade, but also changes the geopolitical landscape and shifts global economic alliances. For this reason, Indonesia has begun optimizing its membership and role in multilateral forums such as BRICS (Brazil, Russia, India, China, South Africa), as part of an economic diplomacy strategy based on the principle of free and active.
Political expert in development studies from Brawijaya University, Aswin Ariyanto Azis, expressed his view that BRICS has the potential to become a strategic space for Indonesia in responding to coercive policies from the United States. He said that the forum could be a place for exchanging strategies between developing countries in facing economic pressure from developed countries, especially Trump’s tariff policies.
Aswin also encouraged Indonesia to be more active in maximizing the role of BRICS as a strategic forum in strengthening national economic independence. He explained that member countries are more focused on carrying out internal consolidation and saving their respective national interests, but this condition is actually an opportunity for Indonesia to become a driving force for synergy between developing countries.
Aswin stated that the principle of free and active foreign policy adopted by Indonesia does not mean neutrality without direction, but rather the freedom to determine the direction of foreign policy and actively fight for national interests. He considered that Indonesia has room to pursue these interests through alternative multilateral forums such as BRICS, which are considered to better reflect the solidarity of developing countries.
In addition, he considered that BRICS offers great potential as an alternative economic bloc to the dominance of the Western economy. The existence of the New Development Bank (NDB) as an alternative to the World Bank, the Contingent Reserve Arrangement (CRA) as a substitute for liquidity assistance from the IMF, and the CIPS cross-border payment system developed as an alternative to SWIFT, show real efforts to create a new balance in the global economic system.
