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View all search resultsHow should Indonesia respond to Trump's 32 percent tariff?
Rather than raising high tariff walls, we believe strongly that the US and Indonesia are natural economic partners that should be deepening all aspects of our trade relationship.
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White House Press Secretary Karoline Leavitt shows a signed letter on tariffs to South Korean President Lee Jae-myung on July 7, 2025, at the White House in Washington, DC. United States President Donald Trump sent a similar letter to President Prabowo Subianto, warning that Washington will impose a 32 percent tariff unless Jakarta works out a trade and investment deal. (Reuters/Evelyn Hockstein)
U
nited States President Donald Trump recently sent a letter to President Prabowo Subianto, announcing the resumption of a 32 percent tariff for Indonesian imports starting Aug. 1 unless a trade deal is reached.
The 32 percent “Liberation Day” tariffs on Indonesia are deeply unfair, calculated only from the trade deficit itself rather than any sense of whether US exporters really face barriers in Indonesia.
Rather than raising high tariff walls, we believe strongly that the US and Indonesia are natural economic partners that should be deepening all aspects of our trade relationship. While the US had a US$17.9 billion trade deficit in goods with Indonesia in 2024, rising slightly by 5.4 percent from 2023, US exports to Indonesia also rose 3.7 percent last year.
Because the rates of tariff are calculated only on a measure that “would drive [US] bilateral trade deficits to zero,” this leads to some odd results.
For instance, Japan may now be subject to a 25 percent tariff, even though Japan has a significant trade surplus with the US, far larger than Indonesia’s. Japan's exports to the US in 2024 reached $148.2 billion, with the US goods trade deficit with Japan at $ 68.5 billion, according to the United States Trade Representative. Yet the tariff rate on Indonesia is higher.
