The implementation of high import tariffs that the United States began to impose at 19 percent since the beginning of August had an impact on the decline in exports to America in August 2025.

The Central Statistics Agency (BPS) on Wednesday (10/1/2025) released the value of exports to Uncle Sam's country only reached USD 2.72 billion, or shrank by around 12.39% compared to the previous month.

Meanwhile, China is still listed as the destination country for Indonesia's non-oil and gas exports in January-August 2025, followed by the United States in second place and India in third.

The export value of these three countries accounted for 41.2 percent of total exports, according to the BPS report.

BPS Deputy for Production Statistics M Habibullah explained that the value of non-oil and gas exports to China reached USD40.44 billion, or around 22.97% of total national exports.

"The value of non-oil and gas exports to China was recorded at USD40.44 billion," Habibullah said at a press conference in Jakarta, Wednesday (1/10/2025).

He explained that most of Indonesia's non-oil and gas exports to China are still dominated by iron and steel products with a value of USD11.77 billion. After that, there are mineral fuel commodities that contribute around USD5.91 billion, as well as nickel and its derivatives which are recorded at USD4.59 billion US dollars.

This condition occurred amid the achievement of a trade balance surplus for 64 consecutive months since May 2020.

BPS data shows that Indonesia's export value in August 2025 reached US$24.96 billion, up 5.78% compared to August 2024. From January to August 2025, Indonesia's goods trade balance recorded a surplus of US$29.14 billion, up US$10.13 billion on an annual basis.

Meanwhile, the total export value reached US$185.13 billion, up 7.72% compared to the same period the previous year.

However, Indonesia's trade balance still recorded a deficit with a number of major trading partners. The three countries that contributed the most to the deficit were China with a value of USD13.09 billion, followed by Singapore at USD3.55 billion, and Australia at USD3.49 billion.

The US government imposes a universal base tariff of 10% for all countries, then adds higher reciprocal tariffs for certain countries. Indonesia is among those subject to a 19% tariff, while other countries such as Vietnam are subject to up to 46% and China faces additional sectoral tariffs.

Reciprocal tariffs

Deni Friawan, an economic researcher at the Center for Strategic and International Studies (CSIS), believes that the monthly decline in exports to the US is most likely influenced by reciprocal tariffs and the tightening of US import regulations.

"For example, the FDA had rejected Indonesian shrimp products due to Cesium-137 contamination," Deni said.

He also cited weakening American consumer demand due to inflation and high interest rates as well as shopping patterns ahead of the holiday season as additional factors.

Deni emphasized that on the other hand, Indonesia's exports showed resilience amid global pressures.

"The increase in exports in August shows the resilience of the export sector amid downward pressure on global growth," he said.

According to him, this performance was driven by non-oil and gas exports, especially vegetable animal fats and oils including palm oil, as well as nickel and its derivative products.

He explained that BPS data showed an increase in exports to several other countries such as exports to China in August rose 16.03% to US$5.98 billion, to Malaysia rose 7.80% to US$1.05 billion, and to Australia rose 13.87% to US$0.36 billion. Exports to South Korea also increased by 5.12% and to Italy by 8.14%.

"This increase helped offset the decline in exports to America," he said.

According to Deni, China's industrial recovery, especially in the manufacturing and construction sectors, is driving demand for raw materials such as nickel, palm oil and coal.

For Malaysia, the increase was due to the country's role as a hub for Indonesian intermediate products, particularly CPO and its derivatives. As for the European Union, the increase in exports was related to efforts to diversify from the decline in exports to the US due to new tariffs.

BPS data shows that from January to August 2025, exports to the ASEAN region reached US$34.19 billion, up 17.36% on an annual basis. Exports to the European Union in the same period also increased by 11.81% to US$12.76 billion. 

Deni emphasized that despite the increase in exports to various countries, the American market should not be ignored.

"In terms of stability and margins, the American market remains important," he said. At the same time, maximizing trade relations with other countries must be intensified.

Deni believes that market diversification is not only a matter of export value, but also an effort to maintain product quality and trade relations.

Not Dominant

Chairman of the Indonesian Exporters Association (GPEI), Benny Soetrisno, assessed that exports to America are not dominant.

"Our exports to America are no more than 10%, there are still 90% outside America," he said.

According to him, the decline in exports to America due to the 19% tariff has made importers there re-examine whether Indonesian products remain competitive compared to other countries.

Benny explained that US importers did not immediately abandon Indonesian products for fear of losing the market. However, they downplayed the volume first while seeing the impact of tariffs.

"If they leave the market, it will be difficult for them to enter the market again. He still has to be there, but the volume is reduced first," he said.

In line with Deni, Benny considers the markets of China, Malaysia, and the European Union to be increasingly promising. According to him, special export opportunities to the European Union are wide open with the plan to eliminate tariffs in 2027.

"The majority of our HS will be zeroed out there. It will be a kind of first promo," he said.

In terms of sectors, Benny emphasized that manufacturing products have the most potential as an export driver outside the United States.

"The manufacturing sector, of course, because raw commodities always have a world price benchmark. What doesn't have a bourse is manufactured goods," he said.

According to him, manufacturing products have greater added value and can contribute significantly to job creation.

He added that the main challenges for exporters today are access to new market information and bureaucracy. Benny said that many HS codes have been included in free trade agreements but have not been optimally utilized.

According to him, the Trump Tariff policy is an urge for Indonesian exporters to look for opportunities by being more creative in other markets. Benny reminded that this delay will have an impact on the imposition of fines and a decrease in international buyer confidence.

At this point, Benny considers the importance of facilitating the import of raw and auxiliary materials for products to be exported. "If the raw materials come late, the delivery commitment is also late , " he said.