Jakarta. Indonesia must respond cautiously to sweeping new tariffs imposed by former US President Donald Trump’s administration, and avoid being overly accommodating to Washington’s rhetoric, a leading economist warned on Wednesday.

Lili Yan Ing, Secretary General of the International Economic Association, said the Trump-era narrative that countries like Indonesia are responsible for US trade deficits is misleading and fails to reflect the long-standing, mutually beneficial trade relationship between the two nations.

“Indonesia has enjoyed decades of fair economic cooperation with the United States,” she said during the Investor Daily Roundtable at the West Hotel in Jakarta, citing Indonesia’s record $22 billion Boeing aircraft purchase in 2012 as an example of the country’s strong commercial ties with US industry.

Lili pointed out that the US maintains a surplus in services trade with Indonesia and that American companies have generated “trillions of dollars” in profits through their operations in the country, especially in technology, defense, and aerospace sectors.

She emphasized that US consumers are the ones most harmed by the latest wave of tariffs, which are likely to drive up prices and stoke inflation. “Everyone suffers in a tariff war,” she added.

Earlier this year, Trump announced sweeping tariffs on the majority of US trading partners, including Indonesia. These measures -- far broader than the tariffs imposed during his first term -- mark a sharp return to protectionism and have sparked fears of escalating global trade tensions.

Trade experts warn that the unilateral imposition of such extensive tariffs violates World Trade Organization (WTO) rules and could further destabilize an already fragile global trade order. The ripple effects could disrupt supply chains, reduce investor confidence, and slow global economic growth, especially for developing countries like Indonesia that depend on export-driven sectors.

The return of broad US protectionism could also undermine multilateral trade institutions and embolden other countries to pursue retaliatory or inward-looking economic policies.

Lili stressed that while Indonesia should firmly reject unfounded accusations and defend its trade policies, it must avoid retaliatory measures that could escalate tensions.

Instead, she recommended that Indonesia strengthen its regional economic integration through ASEAN and deepen trade ties with key partners such as the European Union and China.

She also urged the government to leverage the influence of U.S. corporations with substantial interests in Indonesia to advocate for fair trade practices. These include Boeing, Freeport, Starlink, ExxonMobil, Chevron, IBM, Apple, Microsoft, Meta, Netflix, Google, Nike, and General Electric.

“Engaging these companies is vital to strengthen our bargaining position in dealing with US policymakers,” she said.

At the same time, Indonesia must stay focused on domestic economic reform to maintain macroeconomic stability and policy credibility. Lili emphasized the importance of fiscal prudence, particularly in keeping the debt-to-GDP ratio below 3 percent.

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