Jakarta. Indonesia doesn’t have the cards to “individually” negotiate tariffs with the US government, according to a senior Chinese economist, citing that it’d be best for Jakarta to join forces with other ASEAN economies in the talks.

US President Donald Trump’s punitive tariffs have injected global uncertainty. 

Indonesia managed to convince Trump to drop the import tax from the originally announced 32 percent to 19 percent. However, the deal saw Jakarta having to remove virtually all tariffs for American agri-food and industrial imports, on top of $15 billion worth of energy purchase pledges. The tariff offensive did not stop there, as Trump recently slapped new tariffs on foreign-made timber, as well as kitchen cabinets and bathroom vanities -- to be effective next Tuesday.

Peking University professor Justin Yifu Lin said that Indonesia was not in a position of power in its negotiations with the Trump government. Rather than going solo, Indonesia should convince other ASEAN countries to engage in the tariff talks as a bloc.

“It’s very important for Indonesia as an ASEAN member to form a consultative group, take the same front, and negotiate with the US [as a bloc]. … Indonesia, individually, does not have the cards to negotiate with the US,” Justin told the 2025 Investor Daily Summit on Wednesday.

“If you [Indonesia] unify your position in ASEAN and with the Plus Three countries, I’m sure you will get a much better position to defend your benefits and negotiate with the US, while also creating a scope for domestic growth.”

By “Plus Three”, Justin was referring to ASEAN’s cooperation framework with three Asian nations: China, South Korea, and Japan. The former World Bank chief economist compared Jakarta's situation with China, which he said did not hesitate to fight back with countermeasures. “We can take a hard [stance] because China's economic size is about the same as the US,” Justin stated.

ASEAN countries have been facing different levels of US tariffs since early August, although Myanmar and Laos are the region’s hardest hit at 40 percent. Malaysia, Cambodia, and the Philippines face 19 percent, just like Indonesia. Trump’s import tax on Vietnamese goods stands at 20 percent, while the rate on Bruneian products reaches 25 percent. The US maintained Singapore’s tariff at the baseline 10 percent. 

When Trump unveiled his tariff move for trade reciprocity in April, ASEAN announced that the group had a "common intention" to engage in a frank and constructive dialogue with the US. The grouping also vowed no retaliation.

Trump’s tariff assault is reshaping supply chains as firms might consider moving their production outside China to avoid Trump’s crushing tariffs. The US and China are currently on a trade truce that will stretch into early November, staving off the triple-digit duties on each other’s goods. However, the truce still remains fragile. 

“Indonesia, perhaps, can fill the gap by producing the products in your country with input for China to be exported to the US. It will be an opportunity to speed up job creation, growth, and export,” Justin said. 

While this means dollar signs for Indonesia, the country still needs to make sure that its investment climate remains attractive, among others, through procedure simplification and infrastructure development.

The Central Statistics Agency (BPS) reported that Indonesia’s exports only reached $2.72 billion in August, down 12.39 percent from the previous month and thereby reflecting the early impact of the US tariffs. Further negotiations are currently underway to make the tariff deal official as Indonesia tries to nudge the US into exempting its palm oil from import duties. However, Jakarta’s chief negotiator Airlangga Hartarto recently admitted that the government shutdown had “put the negotiations to a temporary halt.”

Add as a preferred source on Google +