REPUBLIKA.CO.ID, JAKARTA -- Indonesia became one of the countries subject to high tariffs by the United States of 32 percent in a reciprocal tariff policy that will take effect starting April 9, 2025. This fiscal move is expected to have significant impacts, especially on Indonesia's export competitiveness.
According to the official statement of the Coordinating Ministry of Economic Affairs, sectors of the electronics industry, textiles and textile products, footwear, palm oil, rubber, furniture, and marine fishery products will be directly affected. This policy could significantly lower the volume of Indonesian exports to the US, potentially depressing national economic growth.
In the official statement, the Indonesian government claimed to have taken various mitigation measures. Such measures include the calculation of the impact of tariffs on the industry and the search for export market alternatives. export market alternatives.
“The Indonesian government will continue to negotiate with the U.S. at various levels to ensure national exports remain competitive,” the Ministry of Economic Affairs Coordinator wrote in an official statement on Thursday (3/4/2025) afternoon.
Still in the official statement, mentioned since the beginning of the year, a cross-ministerial team and agency has been coordinating with Indonesian representatives in the US and national business actors to anticipate this policy. RI President Prabowo Subianto also said he had instructed the Red and White Cabinet to speed up deregulation and remove non-tariff barriers to improve the competitiveness of domestic industries.
In fact, the government claimed to have established communication with Malaysia as the holder of ASEAN Privilege to formulate joint steps in dealing with the US tariff policy. Because of this, all ASEAN countries are affected by this policy.
Futhermore, Indonesian government is bracing for the ripple effects not only to the real sector but also to financial stability, particularly regarding the yield spreads of Government Securities (SBN). This preemptive move addresses potential financial market volatility.
The tariff policy is projected to exert downward pressure on the rupiah’s exchange rate and unsettle the Jakarta Composite Index (IHSG) in the coming weeks. Global investors are expected to adopt a risk-off approach toward emerging-market assets, including SBN, which could elevate the nation’s borrowing costs.
"The Indonesian government is committed to stabilizing Government Securities (SBN) yields amid global financial turbulence following the US reciprocal tariff announcement. In coordination with central bank, Bank Indonesia, we are safeguarding rupiah stability and ensuring adequate foreign exchange liquidity to support business needs while maintaining overall economic stability," it states.
Additionally, the government is intensifying engagement with domestic and international stakeholders to refine mitigation strategies. This includes close coordination with central banks and market participants to curb excessive volatility.
Authorities emphasize that policy measures aim to preserve national financial stability and prevent spillover effects on Indonesia’s banking and investment sectors. The goal is to minimize adverse impacts on the country’s financial markets.
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