Indonesia's Strategic Response to US Reciprocal Tariff Policy

KBRN, Jakarta: Indonesian President Prabowo Subianto has instructed the Red and White Cabinet members to take strategic steps in response to the reciprocal policy imposed by US President Donald Trump.

"The President has instructed the Red and White Cabinet members to take strategic steps and structural improvements, as well as deregulation policies, namely simplifying and eliminating hindering regulations," the Ministry of Foreign Affairs stated in a press statement on Friday, April 4, 2025.

US President Donald Trump announced an increase in trade tariffs on countries that have been benefiting from a trade surplus with the US. The announcement was made on Wednesday, April 2. Indonesia is eighth on the list of countries affected by the US tariff increase.

Around 60 countries will be subject to reciprocal tariffs that are half of the tariffs they impose on the US. Indonesia, subject to a reciprocal tariff of 32 percent, is not the only country in the Southeast Asian region targeted by the US trade policy.

Malaysia, Cambodia, Vietnam, and Thailand are among the Southeast Asian countries impacted by the US reciprocal policy, facing tariff hikes of 24 percent, 49 percent, 46 percent and 36 percent, respectively.

The tariffs, which Trump has long echoed, were announced at the “Make America Wealthy Again” event, in the Rose Garden, White House, Wednesday local time.

The Trump-era universal tariffs reportedly are to take effect on Saturday, April 5, while the reciprocal tariffs will be enacted starting next Wednesday, April 9

The Ministry of Foreign Affairs revealed that President Prabowo sharply highlighted the 'Non-Tariff Barrier' imposed by President Trump. This strategic step is considered in line with efforts to increase competitiveness.

"Preserving market players' trust and attracting investment are crucial to sustaining economic growth momentum. Other strategic polices will be taken by the Indonesian government to continue improving the investment climate," the Ministry of Foreign Affairs stated as quoted by rri.co.id.

The Ministry of Foreign Affairs also revealed that the Indonesian government has communicated with Malaysia, as the current chair of the Association of Southeast Asia Nations (ASEAN), to maintain and increase economic growth and create broad employment opportunities.

"Indonesia has communicated with Malaysia as the ASEAN Chair to take joint steps, considering that all 10 ASEAN member countries are affected by the US reciprocal tariff imposition," the statement said.

The US government's policy, according to the Ministry of Foreign Affairs, has a significant impact on the competitiveness of Indonesian exports to the United States.

"Indonesian export products in the US market are electronics, textiles and textile products, footwear, palm oil, and rubber," said the Ministry of Foreign Affairs. ***