Jakarta. Indonesia’s recent membership in the BRICS bloc need not strain its relationship with the United States, even as US President-Elect Donald Trump has vowed to take a tough stance against the group, a presidential advisor said on Tuesday.

Trump has threatened to impose a 100 percent tariff on BRICS members if they pursue creating a rival currency to the US dollar. The bloc, which includes global powers like China and Russia, has been advocating for reduced reliance on the dollar in international trade.

Indonesia officially joined BRICS less than two weeks before Trump’s inauguration, sparking speculation over potential fallout in Indonesia-US trade relations.

Mari Elka Pangestu, deputy chairwoman of the National Economic Agency, sought to calm concerns, citing Indonesia’s longstanding “free and active” foreign policy. This approach sees Indonesia as being free to befriend anyone but does not feel obliged to pick sides or join any military bloc.

“There is no need to worry. We have a free and active foreign policy that allows us to partner with anyone. We don’t interfere with US interests and can even serve as a bridge between developing and developed nations,” Mari Elka said during a press briefing at the palace complex in Jakarta.

When questioned about Trump’s tariff threats and BRICS’ de-dollarization efforts, Mari Elka framed the shift away from the dollar as an inevitable evolution in international finance.

She said it is every country’s right to choose the currency they transact in. Indonesia already has local currency settlement frameworks with countries like China, allowing it to use the rupiah or yuan in bilateral trade. 

“No country has protested against this arrangement. I think [de-dollarization] is something that is bound to happen in international finance, slowly but surely,” she said.

Mari Elka acknowledged that while de-dollarization is progressing, the US dollar remains dominant in global financial transactions and the de-dollarization efforts will take time to have meaningful effects. 

Indonesia-US Trade Resilience
Indonesia’s trade relationship with the US remains robust. Bilateral trade reached $34.5 billion in 2023, with Indonesia enjoying a nearly $12 billion surplus. In the first ten months of 2024, trade amounted to $31.6 billion, with an $11.5 billion surplus for Jakarta.

During his first presidency, Trump ordered a review of Indonesia’s eligibility for the US Generalized System of Preferences (GSP), citing the trade deficit. The GSP, a trade preference program benefiting developing nations, expired in 2020 and awaits congressional renewal.

Indonesia’s entry into BRICS marks a significant milestone in its foreign policy. The 10-member bloc now includes Brazil, Russia, India, China, South Africa, Egypt, Ethiopia, Iran, the United Arab Emirates, and Indonesia.
 

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