The Indonesian Export Companies Association (GPEI) is urging the government to focus on trade diplomacy rather than retaliating with similar measures in response to United States President Donald Trump’s decision to impose higher reciprocal tariffs on several trading partners, including Indonesia.

GPEI General Chair Benny Soetrisno explained that the tariff hike could backfire on the U.S., potentially exacerbating its trade deficit.

“The tariff increases imposed by Trump on all of his trading partners could actually harm the U.S. by increasing its trade deficit, despite tariff reductions for certain countries, including Indonesia,” Benny said.

As part of the new policy, the United States, under President Donald Trump, has imposed an import tariff (reciprocal tariff) of 32% on Indonesia, along with 179 other countries. This move directly impacts Indonesia, making it one of the nations affected by the policy.

On Wednesday, March 2, 2025, President Trump announced sweeping new tariffs on nearly all U.S. trading partners — including a 32% tax on imports from Indonesia, 34% from China, and 20% on the European Union. These measures threaten to dismantle much of the global economic framework and could trigger broader trade wars.

In a Rose Garden announcement, Trump stated that the increased tariffs were being placed on nations with significant trade surpluses with the U.S., while imposing a 10% baseline tax on imports from all countries in response to what he described as an economic emergency.

The president, using strong rhetoric, criticized the global trade system the U.S. helped build after World War II, saying, “Our country has been looted, pillaged, raped, and plundered by other nations.”

Rather than retaliating with similar measures, Benny argued that Indonesia’s government should focus on trade diplomacy to ensure continued access to U.S. markets.

“The government should prioritize diplomatic efforts to maintain smooth export channels to the U.S., rather than escalating the conflict with retaliation,” he said.

Benny further emphasized that if executed effectively, this diplomatic approach could allow Indonesia to preserve its export market share in the U.S., even with the increased tariffs. He also noted that despite the tariff hike, Indonesia’s trade balance with the U.S. could actually improve this year, as several key trading partners face higher tariffs than Indonesia.

“This year, the trade balance with the U.S. could improve, because countries like China and Vietnam are subject to higher tariffs than Indonesia,” he added.