Trump Tariffs Could Cut Indonesia’s Exports to US by Up to 10%

Jakarta: The implementation of a 19 percent reciprocal tariff by the United States could reduce Indonesia’s exports to the country by around five to 10 percent year-on-year, according to Permata Bank Chief Economist Josua Pardede. He also warned of potential risks of weakening new orders from US consumers.

“It’s not possible to simulate the exact impact, but there will certainly be potential for a direct decline in export value to the US, possibly slowing by at least 5–10 percent (yoy),” he said during an online media briefing on Tuesday, August 12, 2025.

Sectors predicted to be hardest hit include apparel (HS 61–62), rubber (HS 40), wood and wood products (HS 44), footwear (HS 64), and electronics (HS 85).

Government intervention needed

The slowdown in Indonesia’s exports to the US is expected to begin in the third quarter of this year. Josua said government policy intervention is necessary, such as providing incentives or stimulus for labor-intensive sectors directly exposed to the US market.

“This could further reduce the impact or at least minimize the negative effects,” he explained.

At the same event, Permata Bank Head of Macroeconomics & Market Research Faisal Rachman noted that Indonesia’s exports to the US have generally grown at double-digit rates.

However, following the implementation of the reciprocal tariff, the figure could drop by three to five percentage points in the second half of the year, particularly from around August.

“The United States is Indonesia’s second-largest export destination after China. On the other hand, China’s demand is also likely to weaken, so it will not be able to offset the drop. Overall, we see a decline from double-digit growth to around three to five percentage points lower,” Faisal said.

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