How far should Indonesia go to appease Trump on tariffs?

Jakarta is weighing trade concessions, but analysts warn the cost may be long-term harm to local industries

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Indonesia’s President Prabowo Subianto gestures as he delivers a speech during an economic gathering on “Strengthening the Resilience of the National Economy” in Jakarta, Indonesia, on April 8. Photo: Reuters

Published: 3:10pm, 14 Apr 2025Updated: 3:42pm, 14 Apr 2025

Indonesia should rethink its strategy of relaxing imports and local content rules to appease Washington as it could weaken its domestic industry, observers have said ahead of high-stakes trade talks at the White House this week.

In a speech responding to US President Donald Trump’s recent tariff moves, Indonesian President Prabowo Subianto said Indonesia’s restrictive import quotas – particularly on essential goods – were hampering trade and needed to be overhauled.

“Whoever wants to import [these commodities], please, feel free,” Prabowo said on April 8. “We’re no longer [assigning the import licences] and allowing only this or that product [to be imported].”

The remarks came ahead of high-level trade talks between Indonesian and US officials, scheduled for Friday, as Jakarta seeks to roll back looming tariffs recently imposed by the Trump administration.

Indonesian President Prabowo Subianto speaks at an economic gathering in Jakarta, alongside his cabinet ministers, on April 8. Photo: Reuters

The US announced a 32 per cent tariff on Indonesian goods on April 2 under a sweeping new trade policy that imposed steep duties on countries with significant trade surpluses with Washington. Although Indonesia posted a US$16.8 billion surplus with the US in 2024, the measure – along with similar tariffs on most countries – was paused for 90 days last week to allow for negotiations.