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In line with his promises and campaign slogans during the election, US President-elect Donald Trump implemented policies to restructure the country’s economy.
These policies were realized in the trade sector by adopting a protectionist system through tariff reforms, which he claimed had long been unfair and had caused deficits for the US.
Consequently, in early April 2025, Trump announced reciprocal tariff policies, which he characterized as part of his ‘Liberation Day’ strategy. The goal was to restructure the global trade system as a reflection of the US commitment to defense, economic reform, and currency revaluation.
However, these policies have had serious impacts on its trading partners. As the world’s largest economy, the United States has a Gross Domestic Product (GDP) of over $30 trillion and a population of approximately 340.1 million people. This makes the US a key trading destination for most countries worldwide, including Indonesia.
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Under Trump’s tariff policy, Indonesia was placed among countries with high reciprocal tariffs at 32%, ranking 15th on the list of US trading partners with the largest trade deficits. For context, in 2024, the US trade deficit with Indonesia reached $17.883 million.
Indonesia is not classified as a strategic adversary like China or Russia but rather holds the status of a conditional swing state. However, Indonesia’s economic policies are now under scrutiny by the US.
Yet, the US assessment does not focus solely on tariffs. In the latest formulation of reciprocal tariff policy, the US also considers various non-tariff measures (NTMs) enforced by its trading partners.
Indonesia is viewed as having several burdensome NTMs that have drawn significant attention from the US government, such as complex import licensing procedures (lartas) and limited quotas for various products, including key American export commodities to Indonesia.
Another concern is the enforcement of Domestic Component Level (TKDN) requirements, which are seen as restricting market access for foreign products, particularly in the technology, medical equipment, and energy sectors. In addition, the regulation on Export Proceeds (DHE), which requires the repatriation of export earnings, is considered disruptive to the cash flow of multinational companies.
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All of these US assessments have contributed to Indonesia’s higher NTMs prevalence score compared to other ASEAN countries such as Malaysia, Vietnam, and Thailand.
According to a 2025 ranking by Dezan, Indonesia ranks fourth highest in the non-tariff barrier prevalence index, following Cambodia, India, and Vietnam.
The imposition of high tariffs by the US is expected to impact global supply chains (logistics) significantly and prompt multinational companies to reassess their production locations.
Countries such as Vietnam, Thailand, Cambodia, and Malaysia, which were previously key destinations for manufacturing relocation from China, are now facing additional burdensome tariffs from the US.
Each of these countries is expected to face reciprocal tariffs ranging from 37% to 46%. This situation clearly opens opportunities for other countries, including Indonesia, to attract investment redirected from those affected by high tariffs.
Indonesia sure has the competitiveness to seize this opportunity for several reasons, including:
Relatively low labor costs
A population of over 268 million people
Gross Domestic Product (GDP) exceeding US$1 trillion
A growing and dominant middle class, and
Stable economic conditions
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However, it is worth noting that Indonesia must also improve its investment climate. The government has set an investment target of Rp1,905 trillion for 2025, focusing on the manufacturing, services, tourism, digital economy, and renewable energy sectors.
If Indonesia fails to take strategic steps to enhance its investment appeal, the country risks missing out on significant investment opportunities.
In the previous period, Indonesia captured only a small portion of global relocation potential, losing out to countries like Vietnam and Mexico that offered a combination of fiscal incentives, bureaucratic efficiency, and more favorable trade agreements.
In addition to those factors, logistics costs must be more competitive and supported by effective and efficient processes. Businesses operating in Indonesia, especially those focused on exports, must be more discerning in choosing professional logistics partners that offer comprehensive services.
One professional logistics company you can partner with to overcome the challenges is SELOG, a business unit of PT Serasi Autoraya (SERA) and part of the Astra Group.
With more than 20 years of experience, SELOG offers a wide range of comprehensive and end-to-end logistics services, Such as Trucking, Shipping Services, Freight Forwarding, Warehousing, and Project Cargo.
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SELOG’s services bring greater convenience, effectiveness, and efficiency to your business by leveraging the latest digital technologies, including the Astra Fleet Management Solution (AstraFMS) and Warehouse Management System (WMS).
Both technologies make it easier for businesses to track the delivery vehicles in real time and ensure the safety of vehicles and drivers. They also help optimize the process of goods receipt, storage, stock management, pick-up, packaging, and shipping.
For more information about SELOG’s services and profile, visit SELOG’s official website at www.selog.astra.co.id and social media in instagram @selog_astra and LinkedIn SELOG.