Headlines have centred on Indonesia’s trade tensions with the US, particularly around the paused 32% ‘reciprocal’ tariffs on Indonesian exports. Those tensions have sparked capital outflows and weighed on the Rupiah. Still, perspective is key. Exports to the US make up just 2% of GDP, and beneath the noise, the macro backdrop remains broadly stable. Bank Indonesia (BI) has held rates steady for the third time running, inflation is well within target, and trade negotiations are at least moving forward.
Tariffs
In April, the US imposed 32% tariffs on Indonesian imports, citing its USD 17.9bn trade deficit in 2024 (US Trade Representative figures). While those tariffs are now paused until July, negotiations remain live. In response, Indonesia has proposed boosting US imports by up to USD 19bn, including key commodities like crude oil, wheat, soybeans and LPG.
To facilitate that shift, new rules announced on 30 April lowered the minimum domestic content requirement for public procurement f...
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