U.S. Tariffs Hit Indonesian Exports as Washington Doubles Down on America-First Trade Policy

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Indonesia’s export-driven economy is beginning to feel the strain as new U.S. tariffs on foreign goods, including steel, textiles, and electronics, take hold. The tariffs, part of a broader push by Washington to revive American manufacturing and end dependence on unreliable foreign supply chains, are already triggering economic ripples in Southeast Asia.

Bank Indonesia’s latest Business Confidence Index reveals a sharp decline in sentiment among local manufacturers, marking the lowest point since the COVID-19 pandemic. Analysts point squarely to U.S. trade action as the cause, particularly increased duties on key sectors that previously relied on easy access to the American market.

While Indonesian officials and industry leaders voice concerns about stalled contracts and suspended orders, U.S. policymakers argue that the tariffs are working as intended: rebalancing trade relationships and bringing production back to American soil.

Indonesia, which is not part of America’s core trade alliances, has long benefited from low-cost exports to the U.S. But with renewed efforts in Washington to bolster domestic supply chains and protect key sectors from unfair competition, nations outside that circle are beginning to feel the squeeze.

Data from Indonesia’s central statistics agency shows that industrial growth has weakened over two consecutive quarters, as local firms face rising costs for raw materials and shipping. With little relief in sight, Indonesian economists are urging the government to shift focus inward and look toward new markets—though none rival the scale or reliability of the U.S.

Meanwhile, Washington appears undeterred. The administration of President Donald Trump, despite pressure from global institutions and foreign allies, has maintained the tariff strategy. 

The implications of this shift are clear: Countries that counted on open access to U.S. consumers may now face increased competition and tighter margins. But for American manufacturers and workers, the strategy is seen as a long-overdue correction to decades of flawed globalism.

As the world moves toward more fragmented trade blocs, Washington’s message remains consistent: America’s economic future will be built at home, not outsourced abroad.