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Comments from Massimo Baggiani, CEO of London-based Niche Asset Management, on Indonesia and the new US tariffs regime.

What will be the impact of Trump's tariffs on Indonesia's economy?

There's no escape - if the 32% U.S. tariff on Indonesian goods is eventually introduced after the current 90-day pause, it would be a clear negative for Indonesia, with a hit to GDP and corporate profits.

In 2024, Indonesia exported about US$26.3 billion (Central Bureau of Statistics) to the US, mainly palm oil, textiles, and electronics. According to our estimates, roughly US$8.0 -10 billion of that could disappear as US buyers baulk at higher prices. But the pain wouldn't stop there. There would be short-term supply-chain ripple effects - for instance, if Chinese manufacturers/exporters, hit themselves by US tariffs, reduce sourcing Indonesian nickel or rubber. It would take some time to adjust, redirecting the goods to other markets. On a rough estimate, that could add a maximum of US$11.0 billion in indirect losses in the short term.

Put it all together, and suddenly 12% of Indonesia's total exports could evaporate in this worst-case scenario. Since exports make up about 20% of GDP, the macro impact wouldn't be trivial. Once multipliers kick in, that US$20 billion export hole could drag 2025's expected growth down from around 5% (which is the current expected baseline) to something like 3.5%. A severe global slowdown could ......................

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