How Are Governments and Private Sectors Responding to Trump's Tariffs?

What can you learn from this article?

1. What was the government's first official response?

2. What did the Presidential Palace spokesperson say?

3. What advice did Jusuf Kalla give as the 10th and 12th Vice President?

4. What about the Indonesian Chamber of Commerce and Industry?

5. What is the response of the furniture industry?

6. Are there any recommendations from the textile and ceramics industry?

1. What was the government's first official response?

The Secretary of the Coordinating Ministry for Economic Affairs, Susiwijono Moegiarso, on Thursday evening (3/4/2025), stated that the imposition of reciprocal tariffs would have a significant impact on the competitiveness of Indonesia's export products in the U.S. market. Indonesia's main export products in the U.S. market have so far included electronics, textiles and textile products, footwear, palm oil, rubber, furniture, shrimp, and marine fishery products.

"We will soon calculate the impact of the imposition of US reciprocal tariffs on these commodities. We will also take strategic steps to mitigate the negative impact on the Indonesian national economy," he said in a press release in Jakarta.

Susiwijono explained that since early 2025, the Government of Indonesia has prepared various strategies and measures to address the implementation of new tariffs by the United States. The Government of Indonesia has also negotiated with the United States Government.

A cross-ministerial and institutional team, representatives of Indonesia in the US, and national business actors have been coordinating intensively to address the US reciprocal tariffs. The government will also continue to communicate with the US government at various levels.

"We will soon send a high-level delegation to Washington DC to negotiate directly with the US Government. Indonesia has also communicated with Malaysia as the holder of ASEAN Chair to take joint steps considering that all 10 ASEAN countries are affected by the imposition of US reciprocal tariffs," he said.

As part of the negotiations, the Indonesian government has prepared various steps to address the issues raised by the US. These issues are outlined in the annual report of the National Trade Estimate (NTE) 2025 published by the Office of the US Trade Representative (USTR).

2. What did the Presidential Palace spokesperson say?

Head of the Presidential Communication Office, Hasan Nasbi, through a short message sent on Friday afternoon, stated that several measures have been prepared by the government to address the challenges of reciprocal tariffs.

"The government is carefully calculating the impact of the reciprocal tariff implementation carried out by the US (United States) government," wrote Hasan in his text message.

Not only conducting studies, Hasan continued, the government is also undertaking other efforts simultaneously. A lobbying team will also be sent by the government to negotiate with the U.S. Government, as the party issuing the policy.

"In parallel with that, the government also sent a high-level lobbying team to negotiate with the US government," said Hasan.

Furthermore, Hasan continued, another measure focused on domestic business actors is also being prepared. This concerns efforts to simplify regulations that have so far hindered domestically produced goods from competing.

"Domestically, the government is also implementing regulatory simplification so that Indonesian products can be more competitive," said Hasan.

3. What advice did Jusuf Kalla give as the 10th and 12th Vice President?

The 10th and 12th Vice President of Indonesia, Jusuf Kalla, stated that U.S. tariff policies tend to be political in nature as they are imposed on countries rather than on commodities. Therefore, the Indonesian Government needs to clarify the basis for the tariff calculations to the U.S. Government.

On the other hand, the tariff policy announced by Trump will directly impact the United States. This is because the price increases resulting from the imposed import duties will be borne by U.S. businesses and citizens.

"The entry cost, it is not us (Indonesia) who pays. We only experience the effects, namely that America's purchasing power is expected to decline due to rising prices," he said to the media in Jakarta, Saturday (5/4/2025).

4. What about the Indonesian Chamber of Commerce and Industry?

The Indonesian Chamber of Commerce and Industry will utilize its relationship with the US Chamber of Commerce to follow up on negotiations between the two countries. Meanwhile, several industry players are still assessing the impact of the 32 percent import tariff.

Chairman of the Indonesian Chamber of Commerce and Industry (Kadin) Anindya Novyan Bakrie said that the US is a strategic business partner of Indonesia. The relationship between Indonesia and the US is a relationship of mutual need. President Trump's statement is an opening speech which means the door to negotiation is still open.

"In early May, according to the plan, in coordination with the government, the Indonesian Chamber of Commerce and Industry will go to the US to follow up on cooperation with the US Chamber of Commerce and attend several business and economic conferences to respond to the latest developments," said Anindya in a press release, Friday (4/4/2025).

According to Anindya, Indonesia still has the opportunity to maintain good relations with the US as a trading partner. The US needs a market for defense equipment, aircraft, and liquefied natural gas.

The US could also subsidize imports of processed nickel and other minerals from Indonesia as long as the minerals are processed according to environmental and labor standards. This is made possible by the critical minerals agreements with the US.

"We can negotiate this with Indonesia's leading export products," said Anindya.

5. What is the response of the furniture industry?

The Indonesian Furniture and Craft Industry Association or HIMKI considers the latest decision by US President Donald Trump to increase import duties for Indonesian export products to the US by up to 32 percent to be a major challenge for the national furniture and craft industry.

This policy is believed to have a significant impact on the competitiveness of Indonesian products in the US market, which has long been one of the main export destinations.

"The government needs to immediately respond to this policy with concrete steps, including holding direct discussions with industry players to formulate the best negotiation strategy in Indonesia-US trade relations," said HIMKI General Chair Abdul Sobur when contacted in Jakarta, Friday (4/4/2025).

As an association that manages the downstream sector of the national furniture and craft industry, HIMKI has conveyed this concern to the government for more than a month, especially through the Ministry of Trade during the IFEX event.

"In fact, on March 7, 2025, we had direct discussions with the Director General of Foreign Trade, Mr. Budi Santoso, to anticipate the impact," said Sobur.

6. What are the recommendations for the textile and ceramics industry?

The General Chairperson of the Indonesian Filament Fiber and Yarn Producers Association, Redma Gita Wirawasta, hopes that the Indonesian government will take the diplomatic and negotiation path with the US government. One of them is by increasing cotton imports from the US to at least 20 percent of the total cotton imports so far. He hopes that this step can contribute to balancing the 32 percent tariff.

"Our textile industry still requires and imports a significant amount of cotton. If we can use more U.S. cotton, there could be a reduction in garment import tariffs to Indonesia," said Gita.

Chairman of the Indonesian Ceramic Association (Asaki) Edy Suyanto, stated that the 32 percent tariff policy by the US to Indonesia will certainly have a big impact on various industrial sectors, including the ceramic industry. Therefore, the Indonesian government must immediately start negotiations with the US which is considered to have unilaterally applied the amount of import tariffs and is not in accordance with WTO rules.

This negotiation and diplomacy is an effort to save the domestic industry, especially the ceramic industry. Indonesia is among the top four ceramic exporting countries to the US.

"To present a more balanced trade balance to the United States, Indonesia can start discussing the possibility of importing liquefied natural gas from the United States where currently the national ceramic industry is experiencing disruptions in gas supply and the high price of gas regasification of 16.77 US dollars per MMBTU. This is the time for Indonesia to open the gas import tap," said Eddy.