The rise of economic nationalism and power rivalry has challenged middle powers such as Indonesia to reassess their long-held foreign-policy doctrines. Once able to maintain flexibility through its bebas-aktif (“independent and active”) approach, Indonesia now finds itself squeezed by escalating protectionism and strategic competition. A stark example of this pressure came with the US’ recent decision to impose a 19 percent tariff on Indonesian imports — part of a broader recalibration of trade policies during US President Donald Trump’s second term.
Although the rate is lower than earlier threats, it comes with strings attached: Indonesia is expected to purchase US$15 billion of US energy, US$4.5 billion of its agricultural products and 50 Boeing aircraft, many of which are wide-body 777 jets. For Jakarta, that is not merely a trade adjustment — it signals a transactional shift in US foreign economic policy that prioritizes deals over partnerships. The episode serves as a wake-up call for Indonesia to reconsider its external alignments in a fractured and increasingly mercantile global order.
Faced with mounting uncertainty from traditional Western partners, Indonesia has responded by pivoting toward emerging powers. Its accession to the BRICS bloc in January — and Indonesian President Prabowo Subianto’s debut at the BRICS Summit in Brazil — marks a decisive shift. This realignment does not merely diversify economic partnerships; it also alters Indonesia’s geopolitical posture, particularly by deepening its ties with China.
Yet, this strategic embrace of BRICS brings new consequences, especially for Jakarta’s delicate relationship with Taiwan.
Trump’s imposition of sweeping tariffs on Indonesian goods is more than just a policy reversal; it symbolizes the erosion of stable economic expectations in the global south. For decades, Indonesia had operated on the assumption that it could reap benefits from both sides of the great-power rivalry. It hedged carefully — accepting investments from China while nurturing partnerships with the US and its allies — but the tariff shock exposed the strategy’s frailties.
Prabowo’s administration was quick to interpret Washington’s move as a sign of unreliability among Western economic partners. In response, Indonesia fast-tracked its efforts to consolidate ties with non-Western coalitions, especially BRICS. By joining BRICS, Indonesia positioned itself alongside China, India, Russia, Brazil and South Africa — nations that increasingly frame themselves as alternatives to the US-led international order.
Within BRICS, Indonesia finds what it sees as a “strategic escape” from the whims of Western economic coercion. It also gains a “soft deterrent” to signal that it is no longer beholden to traditional power centers.
However, the shift is not ideologically neutral. The deeper Indonesia integrates into BRICS — especially under Prabowo’s nationalist-populist foreign policy — the more its diplomacy begins to reflect the strategic preferences of China, the bloc’s most influential member.
Indonesia’s increasingly close relationship with Beijing must be understood not only through the lens of trade and investment, but also through political convergence. Prabowo’s nationalist rhetoric — which stresses sovereignty, self-reliance and non-interference — makes Indonesia more likely to rigorously uphold the “one China” policy.
For a leader who views sovereignty as sacrosanct, endorsing the “one China” policy becomes a way of projecting international consistency. By respecting China’s claim over Taiwan, Indonesia implicitly demands reciprocal recognition of its own territorial integrity — a useful precedent in an era of rising regional contestation and separatist threats. In this view, aligning with Beijing on Taiwan is not submission, but an assertion of Indonesia’s own sovereign dignity.
As a result, Indonesia under Prabowo is expected to apply the “one China” policy with greater stringency. This adherence serves a dual purpose: It cements trust with China, a vital partner in BRICS, and shields Indonesia from accusations of inconsistency on matters of sovereignty.
Yet, a tighter alignment with China introduces a new strategic constraint: Indonesia’s relations with Taiwan might become more fragile, informal and restricted. China, emboldened by what it sees as Jakarta’s compliance, is likely to intensify its pressure to prevent any diplomatic or symbolic engagement with Taipei.
Indonesia has walked a careful line, avoiding high-profile recognition of Taiwan while still maintaining robust unofficial ties, but as China elevates its expectations and monitors Jakarta’s behavior more closely, the space might shrink. Any public signal interpreted as legitimizing Taiwan’s international role could trigger a backlash.
However, Indonesia-Taiwan ties are unlikely to disappear completely. Taiwan remains a critical economic and technological partner. There are thousands of Indonesian students in Taiwan, and Taiwanese firms play an important role in Indonesia. The future of the relationship will depend on both sides’ ability to navigate an increasingly narrow space for cooperation.
A shift can be expected toward what might be called non-political pragmatism — a model in which engagements are carefully framed as economic, academic or humanitarian, rather than political. Subnational diplomacy, think tank collaboration and private-sector partnerships will likely carry the weight of the relationship, while official interactions remain subdued.
Still, that model carries risks. If China’s expectations continue to escalate, even these limited forms of cooperation might face obstacles. Indonesia will be forced to walk a diplomatic tightrope — balancing economic diversification and educational exchanges with Taiwan against its strategic alignment with China.
Dion Maulana Prasetya is an assistant professor in the Department of International Relations at the University of Muhammadiyah Malang in Indonesia.
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