The Indonesian government’s policy requiring exporters of natural resources to deposit all their export earnings in domestic banks for at least 12 months (known as the DHE policy) has become one of the key reasons for U.S. President Donald Trump to impose a reciprocal 32% tariff on Indonesia.
As reported on the official White House website, Trump highlighted several concerns, including the implementation of local content requirements in various sectors, a complex import licensing regime, and the obligation for natural resource companies to transfer all their export revenues to domestic accounts for transactions valued at $250,000 or more.
In addition, U.S. authorities also criticized Indonesia for imposing a 30% tariff on ethanol, while the U.S. charges only 2.5%.
"Monetary tariffs and non-monetary tariffs are two types of trade barriers that governments use to regulate imports and exports. President Trump is countering both through reciprocal tariffs to protect American workers and industries from these unfair practices," a statement from the White House said, quoted on Thursday, April 3, 2025.
Read also: Prabowo mandates 100% retention of export proceeds for one year
Previously, President Trump imposed a basic 10% tariff on all imports to the U.S., along with higher duties on goods from the country’s largest trading partners. Vietnam faced the highest reciprocal tariff at 46%, while Indonesia’s tariff was set at 32%. This controversial policy, announced by Trump in the Rose Garden at the White House on Wednesday afternoon (April 2, 2025), deepens the trade war he initiated during his first term as President.
The new tariffs will create fresh trade barriers for the world’s largest consumer economy, reversing decades of trade liberalization that helped shape the global order, and potentially sparking a new trade war. U.S. trading partners are expected to retaliate with "countermeasures" that could drive up prices for products ranging from bicycles to wine.
On February 17, 2025, President Prabowo Subianto announced that all Export Proceeds from Natural Resources (DHE) must be retained domestically for one year, as stipulated in Government Regulation (PP) No. 8 of 2025. Under this new regulation, exporters in the mining (excluding oil and gas), plantation, forestry, and fisheries sectors must deposit 100% of their DHE into the national financial system for 12 months, in special accounts at national banks. The oil and gas sector will continue to follow the provisions of PP No. 36 of 2023.
"This measure is expected to increase our export proceeds by $80 billion in 2025. If fully implemented over 12 months starting March 1, we estimate proceeds could exceed $100 billion," said Prabowo.
Editing by Reiner Simanjuntak
