Indonesia’s response as a developing country to the United States government’s reciprocal tariff policy

Winda Yulia Sari ()
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Winda Yulia Sari: Padang State University

Journal of International Political Economy and Strategy, 2026, vol. 1, issue 1, 10-22

Abstract: The acceleration of economic growth in Indonesia is also influenced by tariff policies that support international trade, such as the ASEAN Free Trade Agreement (AFTA). However, aggressive tariff policies can create challenges, including intense competition and adverse consequences for certain domestic sectors. The higher reciprocal tariff imposed by the United States on Indonesia, amounting to 32%, constitutes the greatest challenge to the competitiveness of Indonesian exports, particularly key commodities such as electronics, textiles, and footwear. This study aims to analyze Indonesia’s response, as a developing country, to the reciprocal tariff policy adopted by the United States government. This study used a descriptive qualitative method with a literature review. The findings show that the reciprocal tariff policy imposed on Indonesian export commodities reflects the dominant power position of the United States in determining trade rules that affect developing countries such as Indonesia. The tariff policy may reduce the volume and competitiveness of Indonesian exports in the U.S. market, lower production, increase the risk of layoffs, and contribute to the depreciation of the rupiah’s value. In addition, the findings indicate that Indonesia remains highly dependent on the United States market, both in terms of export volume and trade surplus value. Therefore, the Indonesian Government has taken diplomatic measures by pursuing direct negotiations with the United States, preparing proposals for bilateral economic cooperation, and strengthening regional cooperation with ASEAN countries.

Keywords: export competitiveness; Indonesia; reciprocal tariffs; United States; trade policy (search for similar items in EconPapers)
Date: 2026
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