19 Percent US Tariff Applies, Indonesia's Export Performance Is Threatened To Drop

Head of Bank Permata Economist Josua Pardede. (Photo: Special)

JAKARTA - The implementation of the 19 percent tariff by the United States to products from Indonesia has come into effect on August 7, 2025, has the potential to put pressure on Indonesia's export performance.

This condition raises concerns because it can have an impact on the position of national foreign exchange reserves because foreign exchange reserves are also supported by the Export Result Foreign Exchange (DHE) deposited by domestic exporters.

Head of Bank Permata economist, Josua Pardede, said that the decline in US rates on Indonesian products from 32 percent to 19 percent is expected to reduce the negative impact of the potential for Trade War 2.0, considering that the US is Indonesia's second largest export market.

"However, global trade tensions are likely to still burden exports, especially since exports in the first half of 2025 had soared due to in-front purchases ahead of the implementation of the tariff, so it has the potential to normalize in the second half of this year," he said in his statement, Friday, August 8.

In terms of imports, he said, the 0 percent tariff policy on US products is expected to encourage an increase in demand for US goods, especially oil, capital goods, and soybeans.

In addition, Josua conveyed, Indonesia's commitment to bilateral agreement with the US to increase energy imports, agricultural products, and Boeing aircraft is also expected to boost imports.

According to him, the shift in China's trading focus to the African and ASEAN markets also contributed to keeping global export supplies high, thus providing additional pressure on increasing Indonesia's imports.

"The combination of these factors has the potential to cause a decrease in the contribution of net exports to economic growth, in line with our estimate that import growth will be higher than exports," he explained.

In addition, he said, the entry of portfolio capital flows could help maintain the stability of foreign exchange reserves.

Josua said that since the beginning of the year, the Indonesian bond market (SBN) had experienced a flow of net income funds, supported by strong domestic macroeconomic conditions.

In the stock market, growth-oriented government and BI policies also have the potential to attract additional inflows of funds.

Selain itu, Josua menambahkan, meningkatnya ekspektasi penurunan suku bunga oleh The Fed diharapkan akan mendorong sentimen global ke arah risk-on.

"Kami mempertahankan proyeksi cadangan devisa Indonesia pada kisaran 153 miliar dolar AS–157 miliar dolar AS hingga akhir tahun 2025, dibandingkan 155,72 miliar dolar AS pada akhir 2024," ujarnya.

Sementara itu, ia menyampaikan untuk nilai tukar rupiah diprediksi bergerak pada kisaran Rp16.100–Rp16.300 per dolar AS pada akhir tahun 2025, relatif stabil dibandingkan posisi Rp 16.102 per dolar AS pada akhir tahun sebelumnya.

In addition, Josua added, the Fed's increased expectations of lower interest rates are expected to drive global sentiment towards risk-on.

"We maintain the projection of Indonesia's foreign exchange reserves in the range of 153 billion US dollars 157 billion by the end of 2025, compared to 155.72 billion US dollars by the end of 2024," he said.

Meanwhile, he said that the rupiah exchange rate is predicted to move in the range of Rp. 16,100' Rp. 16,300 per US dollar by the end of 2025, relatively stable compared to the position of Rp. 16,102 per US dollar at the end of the previous year.