New Round of Trade War
On April 2, President Donald Trump launched a massive tariff policy in his “Liberation Day” speech, marking a new chapter in global trade politics. The United States announced a universal tariff of 10% on all imports, an additional tariff of 34% on products from China, and high duties on countries such as Thailand (46%), Cambodia (36%), the European Union (20%), Japan (24%), and Indonesia. Strategic sectors such as steel, aluminum, and automotive were also under an additional 25% tariff (Reuters, 2025).
Although the implementation was delayed by 90 days, the signal given was very clear: the United States is moving towards aggressive protectionism, with Asia, including Indonesia, as the next strategic target. This is not just a trade war; this is a repositioning of global economic power, and Indonesia must be prepared.
Direct Impact on Indonesia
Indonesia, which has enjoyed a trade surplus with the US, is now positioned as a “competitor country” by Washington. According to a report by the Indonesian Ministry of Trade, Indonesia’s exports to the US will reach US$23 billion in 2024, with the textile, footwear, automotive, and electronics sectors as the main contributors.
In response to this pressure, the Indonesian government showed its attitude to send a delegation to Washington represented by the Coordinating Minister for the Economy, Airlangga Hartarto. In this negotiation, Indonesia offered concessions to increase imports of US agricultural commodities and facilitate investment by American companies in the energy and manufacturing sectors in Indonesia (Tempo, 2025). However, the more significant question than just short-term concessions is whether this strategy actually deepens Indonesia’s structural dependence on the US.
Learning from Other Countries: Thailand and Vietnam
In this Trump 2.0 trade war scheme, as mentioned above, not only Indonesia but several Southeast Asian countries are included in Trump’s Tariff list. In comparison, Thailand faced similar pressure but chose a different approach. Thailand refused quick negotiations, even though their rice sector experienced a decline in demand due to new tariffs (Reuters, 2025). They preferred to shift their export focus to China and the Gulf countries, despite facing short-term risks.
Meanwhile, Vietnam managed to take advantage of the trade diversion moment: its exports to the US increased by 17% after additional tariffs were imposed on China (Bloomberg, 2025). With an aggressive diversification strategy and investment in the mid-tech manufacturing sector, Vietnam is strengthening its position as a major alternative in the global supply chain. An important lesson for Indonesia: a strategic response to global change is not just to survive, but to turn the crisis into a momentum for growth. However, the question is can Indonesia take advantage of this momentum? With various domestic issues currently raging.
Building a National Strategy: Diversification and Alliances
In facing the fragmentation of the world economy, Indonesia needs to develop three main strategies First, making market diversification an important key to Indonesia’s trade strength. If previously developing countries such as Indonesia relied heavily on the US as the main market, this further increased the risk of uncertainty. So Indonesia needs to change direction to expand trade cooperation opportunities with East Asia, Africa, the Middle East, and Latin America with a focus on high-value commodities. Frameworks such as the Regional Comprehensive Economic Partnership (RCEP) can be optimized to expand market access.
Second, strengthening regional alliances, for example, making ASEAN a joint bargaining force. As conveyed by Malaysian Prime Minister Anwar Ibrahim, ASEAN plans to hold collective negotiations with the US to balance trade relations (Bloomberg, 2025). Therefore, Indonesia, as a country that has significant influence in the history of ASEAN leadership, must initiate a regional negotiation platform to avoid a weak bargaining position if only carried out by one party. Third, to strengthen domestic competitiveness in facing the era of protectionism, the national industrial strategy must be directed at smart import substitution and innovation-based export promotion. According to the McKinsey report (2025), countries with a strong domestic production base will be more resilient in facing global economic fragmentation.
Indonesia’s Position in the New Economic Geopolitics
More than just a tariff issue, Trump’s policies reflect a shift in the world’s power structure. The world is moving towards a new multipolarity, with blocs such as BRICS+ offering an alternative for developing countries. Countries such as Brazil, Russia, India, China, and South Africa are now increasingly joined by countries such as Saudi Arabia, Egypt, and Ethiopia. As a unit under BRICS+ membership, these countries form a new economic network that increasingly challenges US-EU dominance.
Indonesia needs to play an active role in this new reality. In addition to maintaining good relations with the US, Indonesia needs to increase its involvement in the Global South initiative, strengthen its position in the G20, and explore new integration with BRICS+ as a platform for geopolitical diversification.
As Kishore Mahbubani, former Singaporean Ambassador to the UN, put it in his book Has China Won? (2020), “In this new world, developing countries must be smart in playing the balance of power, not just choosing one side (Mahbubani, 2020).” This also applies to Indonesia.
Defining Moment for Indonesia
If we look at the economic climate after the Trump Tariff policy phenomenon, this is not a momentary anomaly. This policy reflects a fundamental change in the development of the global political economy. The form of liberal multilateralism cooperation that has dominated the world since the end of the Cold War is now being replaced by a new reality in the form of fragmentation, protectionism, and regionalism. For Indonesia itself, this condition can be called a ‘defining’ moment. We, as part of the international community, are given the choice to become victims of this new dynamic or to become active players who rewrite the world trade map with partner countries. Market diversification strategies, strengthening regional alliances, and developing domestic industries must be the main pillars of Indonesia’s foreign economic policy. Reflecting on history, countries that are able to adapt to major changes are usually countries that are able to survive through crises and then rise and grow stronger. So, if we look at these two things, Indonesia has that opportunity, if we dare to take it.
