Inequality in Economic Diplomacy: The Case of Indonesia–US Trade

Indonesia’s diplomatic effort to lower export tariffs to the United States has finally borne fruit. After serious and sustained lobbying, President Donald Trump agreed to reduce tariffs on Indonesian goods from 32 percent to 19 percent. Many have welcomed this as a diplomatic triumph—an economic victory worthy of celebration.

I, however, respond with cautious neutrality.

This is not to downplay the hard work of Indonesian diplomats or to adopt an anti-American stance. Rather, it is to point out a critical contradiction: while the US reduced tariffs on certain Indonesian products, Indonesia simultaneously allowed American goods to enter its market tariff-free. In other words, the US gains more, while Indonesia bears the cost. America wins, Indonesia compromises.

Source: WIKIMEDIA COMMONS/PRESIDENT DONALD J. TRUMP

This is not just about numbers. It reflects the asymmetry in global trade relations. Indonesia appears like a student grateful for a passing grade, even as the teacher was never tested.

Under Trump, US trade policy has shifted dramatically—from multilateral cooperation to bilateral, transactional negotiation. Any country seeking tariff relief must lobby Washington, convince the US it will benefit first, and be willing to make concessions. The principle of mutual gain has been replaced by America First.

Indonesia is not alone. Many developing countries are under similar pressure. But what is troubling is our rather passive response. Our economic diplomacy remains largely reactive—responding to short-term challenges instead of constructing long-term strategies.

The government seems to have hailed the tariff reduction as a major win. Yet if viewed critically, it’s akin to rejoicing over a $10 discount on an item you were overcharged $40 for. Trump’s rhetoric about trade deficits—though not always grounded in reality—has succeeded in forcing countries into one-sided deals.

Rather than celebrating prematurely, we must ask critical questions: Will this lead to significant increases in exports? Will small and medium enterprises benefit? Will new jobs be created? And more importantly, what are the risks of American products entering Indonesia with zero tariffs? Are these imports directly competing with local industries?

If most of the answers lean negative, then this so-called "achievement" is little more than a distraction.

Looking ahead, Indonesia must be bolder in drawing red lines in international trade. We cannot merely remain a market for others. We must develop our own industrial base, strengthen downstream industries, add value to our products, and enhance our economic diplomacy capabilities. Without a strong domestic economy, diplomacy becomes the art of bowing deeper.

For comparison, look at China. Despite trade tensions with the US, it has remained firm on national interests. When the US imposed tariffs, Beijing responded with countermeasures. China is not afraid of losing market access, because its industries are strong, its products are needed globally, and its bargaining power is clear. That is what true economic sovereignty looks like.

Indonesia also needs to diversify its export destinations. Overreliance on one major market—especially a hegemonic one—carries significant risk. Regions such as ASEAN, Africa, the Middle East, India, and Latin America offer strategic alternatives. Strengthening South–South cooperation based on solidarity and equity could also reduce dependency.

Economic diplomacy should not be reduced to chasing lower tariffs. It must be about defending national interests in a global economy that is increasingly pragmatic and competitive. We cannot rely on goodwill from powerful nations. We must know what we want—and how to get it—without giving too much in return.

The US tariff reduction should be noted, but not glorified. This moment calls for reflection: Are we strong enough to set our own direction, or are we still busy thanking others for crumbs? True diplomacy is born out of domestic strength. Until we gain economic sovereignty, even our greatest diplomatic wins may prove to be illusions.