NEGOTIATING WITH WASHINGTON
The Trump tariffs give Indonesia impetus to adjust its economic strategy through diversification of cooperation and partnerships. Such moves help to bolster the country’s “free and active” foreign policy as well, through which Indonesia stays impartial to major powers while exerting its influence in regional affairs.
First, the tariffs are an opportunity to strengthen the US-Indonesia relationship. Although the leaders have not met to date, Mr Prabowo called Mr Trump to congratulate him on his election victory, and both men exchanged warm words.
The US remains one of Indonesia’s key security and economic partners. In 2023, the two countries elevated their relationship status into a “comprehensive strategic partnership”, pledging to work towards a stronger and more prosperous Indo-Pacific.
While this was struck during their predecessors Joko Widodo’s and Joe Biden’s tenures, Indonesia should consider reiterating the partnership and discussing its future direction when negotiating with the US on trade. By doing this, Indonesia not only emphasises itself as a reliable US partner in Southeast Asia but also reminds Washington of its commitment to the region.
Moreover, it is plausible for Indonesia and the US to explore new areas of trade, such as on critical minerals, which Indonesia is a major producer of.
