Indonesia Formulates Fiscal Mitigation Strategy for Trump’s Import Tariffs
Jakarta – The government has responded cautiously but firmly to the United States’ planned 10 percent additional tariffs on BRICS member countries, including Indonesia. This new protectionist measure from the United States is a serious concern given its potential impact on trade and national fiscal stability.
Finance Minister Sri Mulyani Indrawati emphasized that the government is closely monitoring developments in global economic policy and has prepared a mitigation strategy.
“We are still closely monitoring global economic developments,” she said.
According to Sri Mulyani, Indonesia, as part of the BRICS, holds a strategic position in the global economy, making it crucial for the government to maintain macroeconomic stability and national economic resilience.
“One of the government’s main focuses is strengthening fiscal and monetary instruments to be more adaptive to external changes,” she added.
The government is also encouraging export market diversification and strengthening domestic industries to reduce dependence on a single region. This way, the risks from the United States’ additional tariff policy can be significantly mitigated.
Meanwhile, Minister of Trade Budi Santoso stated that diplomacy is one of the front lines in the government’s mitigation strategy.
“We have prepared a negotiation team at the embassy. America can change direction very quickly, so we must be anticipatory,” Budi said.
He added that this diplomatic effort is synergized with efforts to deregulate import policies and accelerate bilateral and multilateral trade negotiations. Another strategy is expanding export markets to other regions, which is part of Indonesia’s major trade agenda this year.
“To maintain the momentum of economic growth, the government is also relying on a strategy of strengthening domestic demand by accelerating national priority programs,” he added.
The Director General of Economic and Fiscal Strategy at the Ministry of Finance, Febrio Kacaribu, stated that in the third and fourth quarters of 2025, several programs such as Free Nutritious Meals (MBG), the acceleration of the Housing Financing Liquidity Facility (FLPP), and the development of the Red and White Village Cooperative will be accelerated.
“So, we will be focusing on creating economic activity in the third and fourth quarters. Therefore, we hope economic growth can approach 5 percent this year,” Febrio explained.
Furthermore, the government has also distributed various forms of incentives since early 2025 as a precautionary measure against external pressures. IDR 35 trillion has been disbursed for electricity subsidies, VAT DTP for home purchases, and increased social assistance to 14 million beneficiary families.
“The increased social assistance is provided in the form of IDR 600,000 per family and is expected to be a significant economic stimulus. This is part of our foundation to strengthen public consumption and maintain purchasing power,” he said.
Flexible and responsive fiscal policy is key to mitigating the spillover effects of US protectionist policies. The government has demonstrated its commitment to protecting the national economy through a comprehensive approach that includes trade diplomacy, fiscal intervention, and strengthening the real sector.
By optimizing synergy between ministries and institutions, Indonesia is optimistic about maintaining an inclusive and sustainable economic growth rate amidst global pressures.
