U.S. Slaps Reciprocal Tariffs on 185 Nations Including Indonesia
The United States (US) has enacted a policy of reciprocal tariffs on 185 nations, including Indonesia. Indonesia, under this policy, pays a 32% import tariff. These tariffs are enacted to reflect the rates levied by each nation on U.S. products—hence the name reciprocal tariffs.
This mechanism of trade guarantees equal treatment, yet not every country feels the impact in the same way. Indonesia’s automotive industry does not feel the impact, it seems.
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Gaikindo: No Direct Impact on Indonesia’s Automotive Industry
Indonesia’s domestic automotive industry does not have a direct impact from U.S. tariff policy, says Kukuh Kumara, Secretary General of the Association of Indonesian Automotive Industries (Gaikindo).
We are not affected, as we do not import Completely Built-Up (CBU) vehicles from America,” Kukuh explained to kompas.com on Wednesday (April 9, 2025).
“Our members do not import from the U.S., and even if there is some importing activity, it is not done by our members,” he explained.
No Export Activity to the United States
Kukuh further noted that Indonesia also does not export vehicles to the U.S.
“We have exported to 93 countries, but not to the United States. Currently, our exports to North America are directed to Mexico,” he explained.
He added that raw materials used by the automotive industry are not sourced from the U.S., making the impact of this policy even less significant.
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Shift in Import Trends and Local Manufacturing Growth
Kukuh pointed out that Indonesia’s last direct imports from the U.S. were during the time General Motors (GM) was still present in the country. GM closed its doors about 2005–2006, and there have been no direct imports since then.
The industry has since seen a shift:
- China has become a dominant force in Indonesia’s CBU car imports.
- Some Chinese players are making investments in domestic factories, with plants in development in Karawang and elsewhere.
Japan Dominates Indonesian Car Market
Even with growing interest from China, Indonesian roads continue to be dominated by Japanese brands.
“88% of vehicles plying on the roads in Indonesia are Japanese brands,” Kukuh said.
“However, most of them have high local content, which means they are predominantly made in Indonesia.”
Key Highlights
- U.S. levies reciprocal tariffs on 185 nations; Indonesia’s is 32%.
- Gaikindo assures no direct effect on Indonesia’s automotive industry.
- Indonesia exports or imports no CBU cars to/from the U.S.
- Exports to North America concentrate on Mexico, rather than the U.S.
- China-bound car imports rise, with factories being built.
- Market leadership belongs to Japan; 88% of Indonesia’s cars are made locally with high Japanese content.
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Conclusion: Economic Impact Minimal on Auto Industry
Although U.S. reciprocal tariff policy has wider implications on international trade, Indonesia’s auto industry is not much affected since there is only minimal direct trade with the U.S. and a strong emphasis on domestic production and regional exports.