Indonesia is actively transforming its trade strategy with the United States in response to recent tariff measures imposed by Washington. The Indonesian government, led by Finance Minister Sri Mulyani Indrawati, has announced plans to increase imports from the U.S. as part of an effort to reduce the country’s sizeable trade surplus with its North American trading partner.
This development follows the imposition of a 32% tariff on Indonesian exports by the U.S. administration in early April 2025, a move aimed at addressing perceived trade imbalances. Although the tariff was later reduced to 10% during a 90-day suspension period, the initial levy sent shockwaves through Indonesia’s export sector, which has traditionally enjoyed relatively low tariffs on goods destined for the U.S. market.
Indonesia’s trade surplus with the U.S. reached $4.3 billion in the first quarter of 2025, up from $3.6 billion in the same period last year, making the U.S. the largest contributor to Indonesia’s overall trade surplus of nearly $11 billion during this time. Despite this, trade with the U.S. accounts for less than 2% of Indonesia’s GDP, reflecting a relatively modest economic dependence compared to other partners like China, which accounts for over twice that share.
To address the tariff challenge and demonstrate goodwill, Indonesia has committed to increasing imports of key U.S. products, particularly agricultural commodities such as wheat, soybeans, and corn.
The government is also exploring the possibility of importing more energy resources, including liquefied natural gas, to help meet domestic demand as local production remains insufficient.
“We import not only from the United States but many others … we can always discuss about how we can narrow and put the United States in a better advantage of providing those kinds of agriculture products,” Indrawati stated.
In addition to tariff adjustments, Indonesia has pledged to reduce import duties on certain U.S. goods, including steel, mining products, and health equipment, while lowering tariffs on electronics such as mobile phones and laptops. These measures aim to ease trade tensions and promote a more balanced bilateral relationship without resorting to retaliatory tariffs.
However, the U.S. government’s concerns extend beyond tariffs to include Indonesia’s use of non-tariff barriers, which are viewed as impediments to fair trade. These barriers encompass complex administrative procedures, stringent customs regulations, and restrictive licensing regimes, particularly affecting American agricultural and pharmaceutical exports. The U.S. Trade Representative’s 2025 report highlights these issues as justification for the new tariff regime, underscoring the need for Indonesia to reform its trade policies to align with international standards.
Meanwhile, Bank Indonesia has maintained its key policy interest rates, including the 7-day reverse repurchase rate at 5.75%, to stabilise the rupiah amid volatile market conditions triggered by the tariff impositions and resulting capital outflows. The rupiah recently weakened slightly against the dollar because of ongoing external pressures.
Indonesia’s approach combines diplomatic engagement with economic adjustments. A high-level delegation led by Coordinating Minister for Economic Affairs Airlangga Hartarto has been dispatched to Washington to negotiate tariff relief and seek a more sustainable trade framework. The government’s strategy favours dialogue over confrontation to preserve long-term trade relations with the U.S. while mitigating the immediate economic impact.