Indonesian Shrimp Exports to US Will Decline
At a shrimp farm in Indonesia, more than 16,000 km from Washington, DC, US President Donald Trump’s import tariffs have left Denny Leonardo’s expansion plans in disarray. Leonardo had aimed to add about 100 new ponds this year to his 150-pond farm on the southwestern tip of Java Island but was forced to reconsider when US orders dried up in the wake of Trump’s initial tariff threats in April. And while the latest 19 percent tariff, agreed with Washington in July and due to take effect this week, is less than the initial 32 percent, Leonardo is counting the cost to his business. “With the US pressuring Indonesia’s exports, everyone is eagerly looking for new opportunities to diversify, to reduce their dependence on the US,” the 30-year-old prawn farmer said after July’s announcement. The United States is the biggest market for Indonesian prawns, buying 60 percent of the country’s $1.68 billion in shrimp exports last year. Andi Tamsil, the head of Indonesia’s shrimp farmers’ association, estimates the 19 percent tariffs could see total exports plunge by 30 percent this year compared to 2024, putting the livelihoods of one million workers at risk. (Jakarta Post)
Prabowo Praises His Trade Negotiators
“These real conditions cannot be dealt with through theories or imaginations,” Prabowo said during a plenary cabinet meeting at the State Palace on Wednesday. “Idealism is needed, but what will save us is realism. We must realistically assess the situation and take appropriate steps.” In his opening remarks, Prabowo said the escalating geopolitical and geo-economic turbulence had tested the transformation strategy he announced before taking office on Oct. 20 last year, a plan he reaffirmed was based on “real, factual conditions” at national, regional and global levels. He further highlighted geo-economic uncertainty driven by rising protectionism, particularly the unilateral tariffs imposed by the US. Prabowo praised his economic ministers and the National Economic Council (DEN) for conducting trade tariff negotiations with Washington since April with “composure”. “We’ve succeeded in negotiating without being emotional, without taking the bait and with full awareness of the major interests we must protect,” the President said.“The duty of the Indonesian government is to protect its people, the workers and their families. We’ve reached the best outcome possible for now, but we will not stop striving for better conditions for our economy and for the people,” he emphasized. (Jakarta Post)
Danantara Gets Protection From Normal Losses
The government has issued a regulation that allows state asset fund Danantara to implement cut loss and strategies based on its investment evaluations, without any legal liability over such decisions. A provision in Government Regulation No. 34/2025 on asset management guidelines for Danantara stipulates that the fund must conduct regular evaluations of its investment performance including return on assets analysis, investment requirements and operational needs per year. “Following the evaluation of investment asset performance, the agency may decide to implement cut loss or total loss measures,” the regulation reads, according to a copy of the document seen by The Jakarta Post. The provision also states that neither Danantara nor its employees be held legally liable for any losses resulting from such decisions, as long as they can demonstrate that the losses were not caused by error or negligence. (Jakarta Post)
Chip Shortage Slows Indonesia Car Sales
Indonesia’s car sales recovery has been slowed by the global semiconductor shortage, though the impact is less severe due to demand for “simpler models” with fewer chips. “We produce vehicles with relatively simple variants so that the need for semiconductors is not too massive,” said Gaikindo secretary-general Kukuh Kumara. Major automakers like Toyota and Honda have faced longer delivery times and temporary production cuts, but sales for some brands have surpassed pre-pandemic levels. The government is in talks with global chip makers to set up local production, which industry players say could address supply issues and create jobs. (Jakarta Post)
GDP Grows 5.12% on Projects
Indonesia’s GDP grew 5.12 percent year-on-year in Q2, surpassing the 4.8 percent forecast, driven by infrastructure projects and consumer stimulus. “Thank God, [GDP growth] has bounced back to 5 percent,” said Coordinating Economic Minister Airlangga Hartarto, reaffirming the 5.2 percent annual target. Investment in fixed assets rose 6.99 percent, supported by toll roads, MRT expansions, and housing programs, while government spending on capital goods jumped 30 percent. Economists warn that global trade tensions could pose risks in the second half, though continued stimulus may help sustain growth. (Jakarta Post)
RI Copper Exports to US Get Zero Tariff
Indonesia’s Investment and Downstreaming Minister Rosan Roeslani confirmed that Indonesian copper will enjoy a zero-percent import tariff in the US, with talks ongoing to expand the benefit to other commodities. “For copper, we get a 0 percent tariff,” Roeslani said during the 2025 Indonesia-Japan Executive Dialogue. He noted that nickel and palm oil are among the products under negotiation for reduced tariffs, potentially lower than the current 19 percent. Indonesia is also pushing for tariff-free status on commodities not produced in the US. (Antara) (Editor’s Note: Given that Indonesia currently restricts the export of copper and has positioned even its high value concentrates for domestic use only, its not clear what copper could be exported to the US.)
Danantara Imitates Bulog
In a move that may raise investor eyebrows, the Indonesian government has tasked Danantara with financing a range of projects, from overhauling underperforming fish farms along Java’s northern coast to reviving long-stalled waste-to-energy (WtE) projects. It now appears it has been tasked with using its considerable assets to backstop sugar farmers. Under the Suharto government, the state logistics agency (Bulog) performed the role of mitigating price fluctuations by maintain buffer stocks of commodities such as rice and corn. Bulog still exists but does not seem to be involved. State asset fund Danantara is set to disburse (US$92.25 million) to purchase unsold sugar stored in factory warehouses, according to the industry association. Herman Fauzi, secretary of the Indonesian Sugarcane Farmers Association (APTRI) in the Assembagoes subdistrict of Situbondo, East Java, said Danantara had pledged the funds following talks with the Coordinating Food Minister and Coordinating Economy Minister.“Last week, APTRI’s central board coordinated with the relevant ministries and reached a solution whereby Danantara will channel the funds through PT Sinergi Gula Nusantara [SGN] to make a temporary purchase of sugar from farmers,” he said on Saturday, as quoted by news agency Antara. According to Herman, the Assembagoes sugar factory (PG Assembagoes) has stored thousands of tonnes of unsold sugar over the past month, as it had to reject bids from merchants offering prices below the reference price (HAP) of Rp 14,500 per kilogram. “For four weeks now, merchants have been offering to buy the sugar at only Rp 14,350 per kg and even Rp 14,200 per kg, but the minimum sugar price is Rp 14,500,” Herman said.