World Bank Details Strategies for Indonesia to Counter US Tariffs
Reporter
April 8, 2026 | 11:43 pm
TEMPO.CO, Jakarta - The World Bank assesses that the global policies of the United States, including trade tariffs, have a relatively limited impact on Indonesia's export performance. The Chief Economist of the World Bank for East Asia and Pacific, Aaditya Mattoo, stated that the total tariffs faced by Indonesia are currently below 20 percent.
He noted that this figure is comparable to Vietnam, though slightly higher than those of Malaysia and Thailand. He said that, based on model calculations, the impact of U.S. tariffs on Indonesia’s real income is only about 0.2 percent and is therefore not expected to have a significant negative effect on GDP, as quoted by Antara on Wednesday, April 8, 2026.
He explained that the World Bank's study in the April 2026 edition of the East Asia and Pacific Economic Update report shows that the negative effects of American trade tariffs can be mitigated through domestic trade policy reforms. It is said that Indonesia still imposes many non-tariff barriers, including strict import regulations for raw materials and technical standards.
Mattoo said that if Indonesia implements reforms to reduce non-tariff barriers on goods and services, the benefits would far outweigh the costs of U.S. tariffs, effectively eliminating their negative impact.
He emphasized that through domestic policies, Indonesia can treat Trump's tariffs as small change because the benefits of domestic reform will far exceed the costs of the tariffs.
Previously, on February 19, 2026, in a meeting in Washington, DC, between President Prabowo Subianto and President Donald Trump, Indonesia and the U.S. agreed on a reciprocal trade agreement. The agreement is documented in the Agreement on Reciprocal Trade (ART), which was officially signed by the heads of state of both countries.
Overall, the U.S. applies an average tariff of 19 percent for products from Indonesia. However, the U.S. government provides specific exemptions for certain products identified to receive a 0 percent tariff. In return, Indonesia has eliminated tariffs on 99 percent of U.S. products.
According to the World Bank report, this reciprocal tariff was later replaced by a 10 percent global tariff based on the Trade Act of 1974, Section 122. This tariff is temporary and valid until July 2026.
From January to December 2025, Statistics Indonesia (BPS) recorded that Indonesia's exports reached US$282.91 billion, a 6.15 percent increase compared to the same period in 2024. Non-oil and gas exports reached $269.84 billion, up 7.66 percent from last year.
After China, the U.S. is the second-largest export destination, valued at US$30.96 billion. Non-oil and gas exports to the US amounted to US$4,420.2 million, a 16.66 percent increase from the previous year.
Meanwhile, Indonesia's imports from January to December 2025 reached US$241.86 billion, a 2.83 percent increase from the previous year. Non-oil and gas imports also increased by 5.11 percent to US$209.09 billion. The U.S. ranks third among suppliers of imported goods, providing US$9.84 billion in goods, which accounts for 4.70 percent of total imports.
Read: Who's Winning Under Trump's Tariff Policy?
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