Economist: Export prospects for second half of 2026 overshadowed by US tariffs
Jakarta - An economist from the Center of Reform on Economics (CORE) Indonesia, Yusuf Rendy Manilet, has assessed that the country’s export prospects for the second half of 2026 remain overshadowed by several challenges, including the impact of United States (US) tariff policies and pressure on global commodity prices.
Yusuf stated that the full impact of the US import tariff policy is expected to be felt in the second half of the year, as adjustments to orders from importers typically take several months. Beyond the direct tariff impact, he noted that Indonesia must also anticipate the risk of export order diversions to competing nations such as Vietnam and Mexico, which are considered to have higher competitiveness in the American market.
He further observed that demand for industrial metals from China has not yet fully recovered, as the country’s economic stimulus measures are progressing more slowly than anticipated. Despite these headwinds, Yusuf identified some supporting factors that could sustain Indonesia’s export performance. He highlighted that non-oil and gas exports to China grew by 17.7 percent year-on-year from January to May 2026, providing a buffer against weakening demand in other markets. Additionally, he noted that export growth opportunities remain open as long as demand for downstream nickel products persists.
“With these conditions, I estimate that export growth in the second half of the year will be in the range of zero to two percent, with risks tending to the downside if tariff negotiations with Washington do not result in any easing,” he said.
Previously, the Central Statistics Agency (BPS) reported that the value of Indonesia’s non-oil and gas exports in May 2026 contracted by 4.5 percent year-on-year to 22.45 billion US dollars. The contraction was primarily influenced by a decline in exports of precious metals and jewellery, as well as ores, slag, ash, and iron and steel. By sector, the processing industry still dominated non-oil and gas exports with a value of 19.05 billion US dollars, although this represented a 3.59 percent year-on-year contraction.
Currently, Indonesian exports to the US are subject to a universal tariff of 10 percent, which is valid for 150 days until 24 July 2026. This tariff serves as a temporary replacement for the reciprocal tariff policy previously annulled by the US Supreme Court. The government has stated that it continues to engage in negotiations with Washington to secure more competitive tariff rates, including pushing for a zero percent tariff on certain commodities.