

How to lose friends and help rivals
April 15, 2025
If the US wanted to thrust Indonesia into the strategic political orbit of China, it couldn’t have found a better way than imposing a 32% tariff on imports from the archipelago.
This is well above the 10% baseline levied on the Republic’s near neighbours: Singapore, Malaysia, and the Philippines. Australia copped 10%.
However, Donald Trump’s stance on tariffs waxes and wanes; his most recent act has been to hold off on imposing these costs on some countries, while raising the tariffs on China to a high of 125%.
As expected, China responded to Trump’s decision to add another 50 percentage points to the 54% rate that cut in on 2 April with new tariffs of its own, lifting the rate on imports from the US to 84%. On Wednesday, Trump raised the US rate to 125% in response.
To appease Kadin (the Chamber of Commerce), and show that the government is already planning a fixit, Indonesia has reportedly pledged to send “a high-ranking delegation to Washington to negotiate a better deal".
That’ll be a waste of time, airfares and hotel costs if Donald Trump remains resolute. He also has a special anger for Indonesia, a top exporter, but a nation he’s never officially visited during either of his two presidencies.
Nineteen trips to 25 countries, including the Philippines, all avoiding this lovely land, though he apparently has a golf and residence venture in Bali.
What’s driving Trump – revenge, business or pride? Trade office data reportedly shows Washington’s deficit with Jakarta last year was $7.9 billion, a 5.4% increase year-on-year.
This makes the US the biggest booster for Indonesia’s surplus and a target for Trump’s wrath.
The White House said Trump is “working to level the playing field for American businesses and workers by confronting the unfair tariff disparities and non-tariff barriers imposed by other countries".
Those like Indonesia “did not agree to apply tariff rates on a reciprocal basis”, citing a 30% loading on ethanol imports (made from molasses and palm-oil waste), compared to the 2.5% US tariff on the same commodity.
Another whinge has been Indonesian protectionism through import licensing and rules forcing resource exporters to send earnings above $250,000 back to Indonesia. Jakarta bureaucrats seem to enjoy making business difficult for overseas investors.
One of the goodies exported by Indonesia has been furniture – ironic because this is a trade run in Central Java by former president Joko ‘Jokowi’ Widodo, whose son Gibran is vice-president.
Trump’s policies are hitting the pocket of a still influential retiree who needs to be respected if Washington wants to stay mates.
That’s what the capital says it wants. Its actions semaphore a different signal: Where once the US was deeply concerned about its relationships abroad, it’s now dropping the portcullis and hiding in a fortress indifferent to the issues of Southeast Asia.
It wasn’t always thus.
Till recently, it was China’s growing military influence in the region that drove US policy.
Before Trump started thrashing and bashing, former president Joe Biden tried to get Jakarta to shelter below the Stars and Stripes. No deal. Indonesia values its independence, “rowing between two reefs”.
This is a deeply embedded policy in foreign affairs, dating back to 1948, and originally designed to keep Washington and Moscow away. The communist bogey is now closer and has been getting friendly to the distress of the White House under Biden, though not — it seems — to the new incumbent.
Trump and diplomacy couldn’t sit together in an empty stadium. His aggression suggests he doesn’t care who seduces the world’s fourth most populous nation.
But Beijing does.
Last year, Jokowi’s successor, Prabowo Subianto, was invited to a fireside chat with Biden. Since then, there’s been nothing more from the White House than texts from Trump.
Before the election, Biden hosted Jokowi to celebrate a “new era” in the relationship between the US and Indonesia; the guest politely, but repeatedly, reminded his host of the rowboat analogy.
They eventually settled for a Comprehensive Strategic Partnership; such arrangements rank below bland on the diplomatic register of international deals. The show was sunk last year by domestic affairs – elections and new leaders in both nations.
Footlings haven’t bothered Beijing; Prabowo was given the red carpet by Xi Jinping even before the former general was inaugurated.
On a later visit as president, he signed up for loans of US$10 billion to add to the already heavy debt of US$22 billion. The money is apparently for “infrastructure, green energy, digital technology, and agriculture".
Earlier borrowings were mainly for road and rail upgrades and new transport projects like Whoosh! – high-speed rail from Jakarta to Bandung.
The US and China have been competing for influence in the Malacca Strait chokepoint for decades.
Right now, China is winning despite Biden’s earlier attempt to get his hands on the tiller by going to the Group of 20 summit in Bali in 2022. Vice-president Kamala Harris also attended a regional summit in Jakarta in 2023.
Biden explained that a closer relationship could be most rewarding because “the US is a big country, and its influence on any other country is also very big”. As we all now know, it’s also malevolent.
Jokowi couldn’t be coerced to hand over the reef sailing chart: “Indonesia is always open to co-operating with any country, and not to take the side of any power, except to take the side of peace and humanity.”
Those laudable principles are fluttering into the waste bin from the shredder as Trump discards old deals and rips up hopes for stability.
There’s been media talk of reciprocity, but the national Idul Fitri Islamic holiday has closed down most Indonesian agencies, so a measured response has yet to emerge.
Figures on debt to China are old; in 2022, Indonesia reportedly owed US$20.2 billion and since then the figure has risen. Some economists are claiming Indonesia is already enmeshed in a debt trap with China.
It’s certainly in a trade trap with the US and has yet to work out an escape other than selling more to China and further tearing the already tattered relationship with Uncle Sam.

Duncan Graham
Duncan Graham has been a journalist for more than 40 years in print, radio and TV. He is the author of People Next Door (UWA Press). He is now writing for the English language media in Indonesia from within Indonesia. Duncan Graham has an MPhil degree, a Walkley Award, two Human Rights Commission awards and other prizes for his radio, TV and print journalism in Australia. He lives in East Java.