United States (US) President Donald Trump has agreed to reduce import tariffs on Indonesian goods from 32% to 19%. This decision comes at a cost to President Prabowo Subianto’s government, with several conditions imposed. Andalas University economist Syafruddin Karimi said Trump’s 19% tariff reduction is not good news. Instead, it is considered a serious obstacle to the competitiveness of Indonesian products.
“President Trump’s 19% tariff reduction on Indonesian exports is not good news. Behind this seemingly lower figure compared to the previous threat of a 32% tariff, structural pressures are hidden that jeopardize Indonesia’s position in global trade,” Syafruddin told detikcom on Wednesday (July 16, 2025).
Syafruddin said this agreement places Indonesia in an unbalanced position. This is understandable, considering that while Indonesia is subject to a 19% tariff on all goods entering the US, American goods will not be subject to any tariffs upon entry into Indonesia.
This imbalance paves the way for US products to dominate the Indonesian market and undermines the competitiveness of domestic products. “When imported goods become cheaper due to tariff-free policies, local businesses will face significant pressure, and the space for national industrialization will shrink,” said Syafruddin.
Furthermore, Indonesia is also burdened with significant purchasing commitments: US$15 billion for US energy products, US$4.5 billion for US agricultural products, and the purchase of 50 Boeing aircraft.
“This is not just a trade agreement, but a unilateral purchase package that undermines the foundation of national economic independence. Within the framework of this agreement, Indonesia is seen as a passive consumer market, not an equal and sovereign trading partner,” criticized Syafruddin.
Similarly, Bhima Yudhistira, Executive Director of the Center of Economic and Law Studies (CELIOS), said the news poses more risks than benefits to Indonesia’s trade balance.
“A 19% tariff on Indonesian exports to the US, while the US can get a 0% tariff, actually poses a high risk to Indonesia’s trade balance. So, the risk is greater because the US gets a 0% tariff on imports to Indonesia,” said Bhima, contacted separately.
Bhima believes the results of Trump’s tariff negotiations remain detrimental to Indonesia’s position. He suggested the government encourage market access to Europe as a form of market diversification after the Indonesia-European Union Comprehensive Economic Partnership Agreement (IEU-CEPA) is ratified.
“Similarly, the intra-ASEAN market can be encouraged. We shouldn’t rely too heavily on exports to the US, as the results of the tariff negotiations will still be detrimental to Indonesia’s position,” Bhima said.
July 16, 2025, detikFinance
(https://finance.detik.com/berita-ekonomi-bisnis/d-8013692/trump-pangkas-tarif-ri-jadi-19-kabar-gembira-atau-petaka)