Trump’s victory in the 2024 U.S. presidential election has reverberated worldwide, leaving many countries reassessing their relationship with the U.S. and its future global role. For Indonesia, Trump’s return could open new doors economically while simultaneously introducing significant diplomatic and security challenges. His America First approach and transactional foreign policy have historically focused on practical gains over ideological alliances. This analysis delves into how Trump’s leadership could impact Indonesia’s economy, security, and political positioning in a rapidly shifting world order.
Since his first term, Donald Trump has promoted policies rooted in economic nationalism, defense empowerment, and decreased dependence on China. Now, with his 2024 election win, Indonesia faces a complex mix of opportunity and constraint. Trump’s public addresses—punctuated with promises to cut foreign aid, streamline arms deals, and demand loyalty on contentious global issues—set the stage for an intense four years of U.S.-Indonesia relations. While Indonesia may benefit from a reduction in bureaucratic restrictions on U.S. investment and military exports, Trump’s strategic demands could corner Indonesia diplomatically, pressuring it to lean toward U.S. policies in ways that challenge its long-held stances on non-alignment and independence in foreign policy.
1. Economic Impact: Investment Opportunities and Trade Risks
Trump’s campaign in 2023 was driven by his agenda to decouple from China’s economy, calling for American companies to shift their manufacturing and supply chains to “fair” nations that align with U.S. interests. In an Iowa speech in late 2023, Trump highlighted, “We will break our dependency on China and make sure American companies invest in countries that treat us fairly.” For Indonesia, which stands as Southeast Asia’s largest economy and holds a strategic location, this could create substantial investment opportunities.
However, Trump’s protectionist trade stance introduces substantial risks. In a 2023 rally in South Carolina, he warned, “Any country that takes advantage of America will pay.” Indonesia, which maintains a notable trade surplus with the U.S. in goods such as textiles, footwear, and electronics, may find itself in the crosshairs of this policy. High tariffs could be imposed if Indonesia is perceived as not cooperating with U.S. economic or geopolitical interests. This could complicate Indonesia’s goal of expanding export markets and maximizing the benefits from its strategic role in Southeast Asia.
2. Security Dynamics: Access to U.S. Military Technology at a Cost
Trump’s approach to foreign policy has always been pragmatic when it comes to defense—opting for reduced barriers to arms sales to countries he considers allies. At a campaign rally in April 2024, he asserted, “Our allies should have the tools to defend themselves without unnecessary restrictions.” For Indonesia, which is interested in upgrading its military technology to address regional security concerns, especially in the South China Sea, Trump’s relaxed stance could be a gateway to acquiring advanced U.S. defense systems.
Yet, Trump’s demands on political alignment present a diplomatic cost. His speech at the American Israel Public Affairs Committee (AIPAC) in March 2024 re-emphasized his unwavering support for Israel, suggesting that access to U.S. defense resources may come with expectations of aligning with American foreign policy interests, including those in the Middle East. This could place Indonesia, a vocal supporter of Palestinian rights, in a difficult position. Should Indonesia pursue closer defense ties with the U.S., it might be pressured to moderate its pro-Palestinian stance, risking domestic backlash and regional alliances.
3. Reduced Foreign Aid: Shifting Responsibility to Local Governance
Another critical aspect of Trump’s return is his stance on foreign aid. He reiterated in Texas in early 2024, “Every dollar we spend overseas should directly serve America’s interests.” Trump’s rhetoric suggests further cuts to international assistance programs, particularly those he deems unrelated to core U.S. interests. For Indonesia, this could mean a reduction in USAID grants that have long supported local initiatives in education, health, and social welfare.
While Indonesia’s economic stability may not be immediately threatened, the loss of U.S. aid would impact vulnerable communities relying on educational and health support programs. With domestic resources already stretched, especially in rural areas, reduced U.S. assistance could pressure the Indonesian government to fill funding gaps, potentially diverting resources from critical infrastructure or social development initiatives. In the long run, this could exacerbate inequality and strain the state’s capacity to deliver essential services.
4. Diplomatic Pressure and the Rise of Populism
Trump’s America First slogan and populist style, notably highlighted in a September 2023 Alabama rally where he emphasized, “Every country should put its people first, just like we do,” echoes sentiments that resonate with nationalist movements globally. In Indonesia, which has seen rising populism, Trump’s rhetoric may embolden local leaders to adopt similar positions, appealing to sentiments of sovereignty and resistance to foreign influence.
While nationalist rhetoric could bolster Indonesia’s identity on the global stage, it risks fostering an insular approach that could harm its diplomatic relations and its image as an advocate of open, multilateral cooperation in ASEAN. Trump’s emphasis on national priorities, if echoed in Indonesia, may lead to policies that disrupt regional collaborations or jeopardize Indonesia’s historical position as a non-aligned, independent voice in global affairs.
Conclusion
The implications of Trump’s re-election for Indonesia are both nuanced and profound. Indonesia may benefit economically from the potential investment shifts as American companies relocate supply chains out of China. Additionally, access to U.S. military technology under Trump’s more lenient arms policy could offer Indonesia an edge in securing its interests in the South China Sea. However, these benefits come with a price: the economic gains could be countered by tariffs if Indonesia does not align closely enough with U.S. policies, particularly concerning China. The potential reduction in U.S. aid could stress domestic resources and complicate social welfare strategies. Trump’s unwavering support for Israel could put Indonesia in a diplomatic bind, potentially forcing it to reconcile its defense needs with its longstanding pro-Palestinian stance.
In the broader diplomatic sphere, Trump’s populist style could indirectly influence Indonesia’s political climate, amplifying nationalist rhetoric and challenging its balanced foreign policy. The Trump presidency, with its high-stakes, high-pressure style, forces Indonesia to reassess how it engages with the U.S., weighs the trade-offs of defense alignment, and manages the balancing act of navigating competing superpowers.
As Indonesia approaches this new era, its leaders must weigh each opportunity and threat carefully, safeguarding the nation’s interests while preserving its independence on the world stage. Trump’s presidency signals both a test of Indonesia’s diplomatic acumen and a strategic moment to define its place in an increasingly polarized global order.
