Dhea Marsha Ananda
THE PROGRESS OF Indonesia‘s international trade is key to economic progress, with a focus on shifting from a commodity-based economy to investment, production, and high-value services through strategic policies. The goal of Indonesia’s economic transformation is to improve international trade ties and solidify Indonesia’s position as a global economic leader by focusing on the development of human resources, energy, infrastructure, transportation, public finance, industry, trade, and agriculture. Indonesia’s international trade growth is also influenced by far sighted economic policy. The closed model of Indonesia’s international trade has given way to a more open, globally linked model that is centered on exports as the world economy changes.
Indonesia’s trade strategy has developed rapidly, with the aim of becoming a competitive and advanced economic power. One of the strategies driving Indonesia’s economy is export-import activities, by reforming tariff policies and increasing export competitiveness. Currently, Indonesia is focusing its efforts on increasing export activities as a strategy to expand its market reach. Specifically in June 2025, Indonesia’s exports saw an increase of 11.29% year-on-year, reaching a total of U$ 23.44 billion, which is higher than the market forecast of 10.41% (Suroyo, 2025). This surge can be attributed to several factors, including:
I. Acceleration of exports in anticipation of US tariff policy
This may occur due to new tariff policies from the US. Indonesia has successfully reached an agreement that reduces US tariffs from 32% to 19%, and exporters are accelerating shipments before the deadline takes effect.
II. Non-oil and gas export performance
III. Commodities such as metal ore, slag, and ash experienced a surge of up to 3,736.49%.
IV. Animal/vegetable fats and oils increased by 22.5%, contributing 2.85%.
V. Precious metals and jewelry rose by 104.44%, contributing 2.59%.
VI. The agriculture, forestry, and fisheries sectors showed an increase of 49.55%.
As a result, exports have achieved positive cumulative growth. As of June 2025, Indonesia’s national export value reached US$135.41 billion, marking a 7.70% increase compared to the same period in the previous year. This growth reflects the strengthening performance of the international trade sector, driven by efforts to optimize export markets and diversify leading commodities.
Tabel 1. The Value of Exports (Million US$), 2025
This happened because of an evaluation of import and export tariffs. In the recent most trade negotiation, Indonesia has eliminated tariffs on more than 99% of US goods and scrap all non-tariff barriers facing American firms. However, there are exceptions for certain products, such as alcoholic beverages and pork, which are specifically excluded from the zero percent tariff provision. The US government reduced import duties on Indonesian goods from 32% to 19% in reaction to this strategy.
The US Census Bureau reports that between January and May 2025, US exports to Indonesia came to $ 4.21 billion, or Rp 67.4 trillion. In comparison, during the same period, U.S. imports from Indonesia reached $13.92 billion, or nearly Rp 222 trillion. In 2024, the United States exported goods worth $10.15 billion (around Rp 162 trillion) to Indonesia, while its imports from Indonesia amounted to $28.05 billion (approximately Rp 448 trillion). The following 10 biggest non-oil and gas export goods from the United States to Indonesia in 2024 are the target of the 0% tariff policy, according data from the United Nations (UN) Comtrade cited by Trading Economics (July 17, 2025):
I. Seed oil, grains, oleaginous fruits, seeds, and fruits, with a combined worth of $ 1.26 billion (about Rp 20.1 trillion).
II. Boilers, machinery, and nuclear reactors, totaling $1.11 billion (about Rp 17.7 trillion).
III. Organic compounds, which are worth about Rp 14.6 trillion ($ 914.96 million).
IV. Animal feed, residues, and food industry waste, totaling $ 618.06 million (about Rp 9.8 trillion).
V. Spacecraft and aircraft valued at $ 523 million, or roughly Rp 8.3 trillion. 6. Electronic and electrical equipment, valued at around Rp7 trillion ($438.46 million).
VI. Electronic and electrical equipment, valued at around Rp7 trillion ($438.46 million).
VII. Waste, fibrous cellulose products, and wood pulp, valued at $400.76 million (about Rp6.4 trillion).
VII. Equipment for photography, technology, medicine, and optics, worth $ 271.24 million (about Rp 4.3 trillion).
VIII. Food items, dairy products, eggs, and honey, totaling $214.76 million (about Rp 3.4 trillion).
IX. Plastics, valued at around Rp 3.2 trillion ($ 204.36 million).
It is anticipated that imposing zero percent tariffs on certain items will boost market access, boost bilateral trade volume, and promote expansion in key industries in both nations. It can conclude that Indonesia’s 2025 international trade policy transformation is a strategic move toward improving economic competitiveness through tariff policy reforms and export activity optimization. The 11.29% increase in exports in June 2025 is concrete proof that the national economy may benefit from quicker shipping tactics, commodity diversification, and the performance of the non-oil and gas industry. Mutually beneficial trade relations have been strengthened through bilateral trade cooperation with the United States, which includes the implementation of zero percent tariffs on the majority of commodities, a reduction in US import tariffs on Indonesian goods from 32% to 19%, Trade data indicating a surplus for Indonesia suggests significant possibilities for further market expansion and Indonesia has the potential to become one of the major economic powers in the world if it adopts a consistent and deliberate approach.
[ Dhea Marsha Ananda is an intern at COGGS. ]
References
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Sudarshan Varadhan, F. N. (2025). Indonesia nickel slump piles pressure on coal miners hit by falling exports. Singapore: Reuters.
Suroyo, G. (2025). Indonesia’s exports rise again in June as U.S.-bound shipments jump. Jakarta: Reuters.
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