Indonesia urged to rethink export-led growth after US-China trade deal

Experts warn of risks to Indonesia’s economic stability, call for diversification to avoid dependence on few key markets

JAKARTA, Indonesia (MNTV) – Economists are warning Indonesia to reassess its economic strategies following the landmark US-China trade agreement, which marks a significant shift in global economic dynamics.

The agreement, announced on May 12 involves a phased reduction of tariffs that had reached 145 percent on some Chinese goods and 125 percent on American exports. While the deal is expected to boost global trade, economists say it carries deeper implications for developing economies like Indonesia.

“If economic giants like the US and China are backing away from trade wars due to their unsustainable costs – inflation, job losses, and business strain – what about smaller economies?” said Syafruddin Karimi, an economist at Andalas University’s Department of Economics.

Karimi emphasized that Indonesia must learn from the US-China trade deal and diversify its economy to reduce dependence on export-led growth. 

“We need a strong domestic market, resilient local industries, and independent policies. It’s time to stand on our own feet before another crisis forces us to change,” he said.

Indonesia’s economy has long been reliant on exports, particularly of commodities like palm oil, coal, and natural gas. 

However, this approach has left the country vulnerable to fluctuations in global demand and prices.

The Indonesian government has yet to respond to the US-China trade deal, but economists say it’s crucial for the country to reassess its economic strategies to remain competitive in the global market.