Industry simulations and analysis by Indonesia’s Ministry of Trade in April 2025 showed that tariff policies imposed by the US have weighed heavily on several of Indonesia’s key export sectors, including textiles and garments.
“Indonesia’s main export products to the United States include electronics, textiles and textile products, footwear, palm oil, rubber, furniture, shrimp and other marine fishery products,” Coordinating Minister for Economic Affairs Airlangga Hartarto said in April last year.
“The imposition of these reciprocal tariffs will have a significant impact on the competitiveness of Indonesia’s exports to the United States,” he added.
However, Deni Friawan, a senior researcher at the economics department of the Centre for Strategic and International Studies (CSIS), said Trump’s tariffs are not uniformly negative for businesses.
The tariffs are a double-edged sword, he said.
“On the opportunity side, they can open up new markets or prompt a repositioning or reconfiguration of supply chains, as some countries look for non-partisan, or neutral, partners,” Deni said.
Indonesian companies need to take a more anticipatory approach to global uncertainty by strengthening strategic planning, particularly through diversifying markets and supply sources to avoid over-reliance on a single country, especially China, he said.
Diversification can be pursued through nearshoring and friend-shoring, by shifting parts of supply chains to geographically closer countries or to partners seen as more geopolitically stable to reduce risk.
“Beyond that, companies also need to set up dedicated units or teams to monitor geopolitical risks and develop scenarios and contingency plans,” he said.
https://www.channelnewsasia.com/asia/indonesian-businesses-global-uncertainty-cna-summit-2026-5897846
