Indonesia reported a trade surplus of US$160 million in April 2025, the lowest in five years and far below the US$3.04 billion expected in a Reuters poll.

The drop was mainly due to a 21.84% year-on-year increase in imports, which reached US$20.59 billion.

Exports rose by 5.76% to US$20.74 billion, in line with expectations.

Trade with the United States reached US$2.08 billion in April, affected in part by a 10% tariff imposed by Washington earlier in the month.

Negotiations are ongoing to reduce tariffs scheduled for July.

🔗 Source: Reuters

🧠 Food for thought

1️⃣ Rising protectionism creates ripple effects across Southeast Asia’s trade patterns

Indonesia’s shrinking trade surplus represents a broader regional challenge as US tariffs reshape trade flows across ASEAN.

The US imposed a 32% tariff on Indonesian goods as part of a wider trade strategy, directly impacting key export sectors like textiles and electronics 1.

This explains why shipments to the US ($2.08 billion in April) are specifically mentioned in relation to tariffs in the original article.

The sharp rise in imports from China and Singapore noted by Bank Central Asia’s economist likely reflects trade diversion strategies, as regional supply chains adjust to US tariff policies 2.

Southeast Asian nations have largely avoided retaliatory tariffs in response to US measures, instead pursuing diplomatic engagement to preserve their export markets, a strategy Indonesia is following with its ongoing negotiations 3.

Economic projections suggest these tariffs could reduce Indonesia’s GDP growth by 0.3 to 0.5 percentage points, highlighting the significant economic stakes involved 4.

2️⃣ Capital goods import surge signals potential industrial reconfiguration

The dramatic 21.84% year-on-year increase in imports, nearly triple what analysts expected, suggests Indonesia may be undergoing significant industrial retooling.