In April 2025, U.S. President Donald Trump announced sweeping “Reciprocal Tariffs,” imposing up to 60% import duties on countries with large trade surpluses with the United States. This policy, outlined in Annex I of the executive order, targets major exporters like China, Germany, Mexico, Vietnam, and Indonesia. China quickly responded by raising its own tariffs, with some U.S. goods now facing up to 125% tariffs, far higher than before. This trade escalation shocked global markets. Although the U.S. excluded some products like copper, energy, pharmaceuticals, and certain “critical minerals” listed in Annex II. Many processed minerals from Indonesia remain potentially affected. Indonesia, which enjoys a $26.3 billion trade surplus with the U.S., faces a 32% tariff posing a serious risk to its mining-based economy. This article explores how Trump’s tariff strategy affects Indonesia, how other mining countries are reacting, and what it means for global commodity prices and trade flows.
| Country | U.S. Import Share | Tariff |
| China | 13.4% | 125% |
| Japan | 4.5% | 24% |
| Vietnam | 4.2% | 46% |
| South Korea | 4% | 26% |
| Taiwan | 3.6% | 32% |
| India | 2.7% | 27% |
| Thailand | 1.9% | 37% |
| Malaysia | 1.6% | 24% |
| Brazil | 1.3% | 10% |
| Philippines | <1% | 18% |
| Indonesia | <1% | 32% |
| Australia | <1% | 10% |
The Tariff Storm: Indonesia’s mining commodities Direct and Indirect Risks
Indonesia’s nickel, copper, and coal exports—critical to its economy—are now under pressure. While only 9.35% of its exports go to the U.S., the tariffs risk disrupting global supply chains and lowering demand from partners like China and India, which absorb 52% of Indonesia’s nickel exports. Worse, a global economic slowdown triggered by trade wars could depress commodity prices further, squeezing Indonesia’s foreign reserves and weakening the rupiah.
The following are some of Indonesia’s commodities that are exported to countries affected by the high tariff policy from the US.
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Nickel Exports (2023)
| Destination Country | Export Value (USD) | Share of Nickel Exports (%) |
| China | $5.96 billion | 52% |
| Japan | $1.48 billion | 13% |
| South Korea | $975 million | 8.5% |
| India | $465 million | 4% |
| United States | $34 million | <0.5% |
Note: Products include nickel matte, ferronickel, and MHP (Mixed Hydroxide Precipitate).
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Copper Exports (2023)
| Destination Country | Export Value (USD) | Share of Copper Exports (%) |
| China | $2.2 billion | 38% |
| Japan | $1.6 billion | 28% |
| South Korea | $790 million | 14% |
| India | $220 million | 4% |
| United States | $63 million | 1.1% |
Note: Products include copper concentrate and refined copper.
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Coal Exports (2023)
| Destination Country | Export Value (USD) | Share of Coal Exports (%) |
| India | $6.4 billion | 18% |
| China | $5.9 billion | 16% |
| Philippines | $2.1 billion | 6% |
| Vietnam | $1.7 billion | 5% |
| Malaysia | $1.6 billion | 4% |
| United States | < $5 million | <0.1% |
Note: Most Indonesian coal exports are medium- and high-calorie types used for power generation.
The indirect effects are equally concerning. Countries like Australia and Brazil, major suppliers of iron ore and rare earth minerals, are adopting defensive measures. Australia tightened anti-dumping rules, while Brazil passed laws enabling retaliatory tariffs. Such moves could fragment global trade, creating volatility for Indonesia’s mining-dependent sectors.
Global Responses: Protectionism vs. Pragmatism
Australia prioritized protecting its lithium and aluminum industries—key to the U.S. tech sector—by avoiding retaliation and diversifying exports to Asia. Brazil took a legal route, authorizing counter-tariffs to shield its mining sector. China, hit by 34% U.S. tariffs, escalated tensions by retaliating with a staggering 84% tariff on American imports, a sharp rise from its initial 34% response. This aggressive move, denounced by Beijing as a defence against “economic coercion,” risks triggering a full-blown trade war. Canada imposed 25% tariffs on $155 billion of U.S. goods, while India opted for cautious negotiations.
These divergent strategies highlight a fragmented global response. However, one trend is clear: nations are scrambling to safeguard domestic industries, often at the expense of international cooperation.
Commodity Prices Tumble Amid Uncertainty
Source: United State Geological Survey
Despite exemptions for base metals, copper and aluminum prices fell sharply in the post-announcement. Copper dropped 12% from USD 4.89/lb to USD 4.28/lb, while aluminum slid 3.3%. Gold, typically a safe haven, also declined as investors flocked to the strengthening U.S. dollar. Mining consultants warn that fears of reduced industrial demand and a stronger dollar are driving this slump.
Figure 1. Decline in Gold Commodity Prices, days after Trump tariff announcement
Figure 2. Decline in Copper Commodity Prices, days after Trump tariff announcement
Figure 3. Decline in Aluminum Commodity Prices, days after Trump tariff announcement
“Indonesia’s push for downstream processing is wise, but it needs agile strategies to navigate tariff-driven disruptions”
noted a mining consultant familiar with nickel supply chains. The country’s focus on refining raw materials domestically could cushion blows from trade barriers, but only if supported by targeted policies.
Indonesia’s Path Forward: Recommendations
- Diversify Export Markets and ESG Compliance: Accelerate trade deals with the EU and ASEAN to reduce reliance on the U.S. and China. Align with EU carbon standards to access premium markets.
- Boost Diplomacy: Appoint a U.S. ambassador and form a trade task force to negotiate exemptions or reductions.
- Leverage Expertise: Partner with mining consultants to optimize commodity exports and attract investments in smelters and refineries.
Conclusion
Trump’s tariffs have upended global trade, forcing Indonesia to balance short-term risks with long-term reforms. While the recent 90-day tariff pause offers temporary relief, proactive measures—like market diversification and strategic partnerships with mining consultants—are vital to securing Indonesia’s economic resilience. As trade wars reshape alliances, Jakarta must act decisively to avoid isolation in an increasingly fragmented world.
Author(s): Muhammad Kholily; Akhmad Maulana Putra Dewanto; Reinaldi Santoso
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