Indonesia’s Strategic Moment: Trade, Trust, and the Transformation of Government

Indonesia is standing at the edge of a rare and powerful convergence—where geopolitics, trade realignment, and domestic reform come together to offer a generational opportunity. The potential rollback of U.S. tariffs under a second Trump administration would create significant new space for Indonesian exporters, particularly in textiles, apparel, and footwear. But even more critical than trade preferences is our ability to respond as a nation—by building a more agile, transparent, and digitally empowered government ecosystem.

If we can rise to that challenge, Indonesia won’t just benefit from this moment—we’ll lead it.

A Competitive Exporter Facing Structural Tariffs

Indonesia is among the United States’ top suppliers in labor-intensive consumer goods. In fact, our exports in these sectors already demonstrate world-class capabilities:

• Textiles (HS61): $2.3 billion in exports to the U.S., with a 19% tariff

• Apparel (HS62): $2.1 billion in exports, also facing a 19% tariff

• Footwear (HS64): $2.6 billion in exports, again with a 19% tariff

Meanwhile, countries like Honduras, Guatemala, and Nicaragua—with smaller economies—enjoy much lower tariffs (10–18%). Vietnam, our strongest peer competitor, ships more than triple Indonesia’s volumes in some categories, often under similar or more favorable trade terms.

Tariff reductions would immediately boost Indonesia’s competitiveness. But this should not be mistaken as the end goal. It is only the catalyst.

^{Tariff impact is relative vs. other countries with similar products.}

^{19% tariff is a big win for labour intensive sectors.}

^{A big win for Indonesia diplomacy.}

Indonesia’s Geo-Economic Strength: Not Just Potential—A Mandate

Indonesia is not a fringe economy. It is a strategic, global player:

• 4th largest population in the world (280+ million)

• A $1.5 trillion economy, and Southeast Asia’s largest

• Projected to become the 7th largest economy globally by 2030 (PwC)

• Founding member of ASEAN, and now a full member of BRICS+

• An essential link in Indo-Pacific supply chains and global Muslim consumer markets

We are no longer a country with potential. We are a country with a mandate: to act, to build, and to lead.

The Imperative of Digital Government

That leadership, however, must begin at home. We cannot maximize our external opportunities without transforming our internal capabilities. That’s why I strongly support the initiative of MenPAN-RB to accelerate government digitalization and inter-agency integration.

Digital governance is no longer a technical upgrade—it is a strategic necessity. It improves:

• Coordination between ministries for faster investment approvals

• Data-driven policymaking to support MSMEs and local industries

• Service delivery that builds public trust and institutional legitimacy

• Economic agility during global disruptions, whether in logistics, climate, or capital markets

For investors, both domestic and foreign, a digitally enabled state means predictability, efficiency, and confidence.

Trade Policy Must Be Matched by Governance Excellence

We cannot rely solely on favorable trade winds to define our path. Even with lower tariffs, global investors will seek countries with strong rule of law, responsive institutions, and high-quality infrastructure—both physical and digital. These are the areas where Indonesia must now lead by example.

The transformation of government is not just about services—it is about sovereignty, resilience, and wealth creation.

A Call to Action

As Vice Chairman of KADIN, I have seen firsthand the energy, innovation, and dedication of our business communities—from large-scale manufacturers to small village entrepreneurs. What they need now is a state apparatus that moves at the speed of opportunity.

This is Indonesia’s moment. A moment to trade more, yes—but more importantly, a moment to build better. By embracing digital government reform, strengthening coordination, and ensuring policy continuity, we can turn today’s momentum into long-term prosperity.

We don’t just need better tariffs. We need better systems. And the time to build them is now.