The shift in United States economic policy orientation in 2025, particularly through the trade protectionism policy of the Liberation Day Tariffs and the Federal Reserve's "higher-for-longer" monetary policy, has increased global economic and financial uncertainty. This condition has the potential to exert pressure on developing nations with strong ties to the international trade and financial system, including Indonesia. This study aims to analyze the impact of the 2025 U.S. economic policies on Indonesia's financial market and to explain the underlying transmission mechanisms and strategic interactions.
The research employs a qualitative descriptive method with a case study approach. Data were gathered through literature reviews and document analysis from academic publications as well as national and international institutions, and were subsequently analyzed through data reduction, data display, and conclusion drawing. The analysis utilizes the perspectives of International Political Economy and Game Theory to explain the asymmetric relationship between the United States and Indonesia.
The results indicate that U.S. economic policies are transmitted to Indonesia's financial market through four main channels: trade, exchange rates, international capital flows, and global risk and sentiment. These impacts are reflected in increased volatility and pressure on the Jakarta Composite Index (IHSG), the depreciation of the rupiah, and rising government bond (SBN) yields, particularly from the early to mid-2025 period. U.S. monetary policy, which maintains high interest rates, drives the strengthening of the U.S. dollar and portfolio reallocation toward U.S. assets, while tariff policies increase trade uncertainty and risk perceptions regarding developing economies. However, this pressure is dynamic and influenced by domestic factors as well as the policy responses of Bank Indonesia and the Indonesian government.
This study demonstrates that U.S. economic policies act as an external shock that amplifies the vulnerabilities of Indonesia's financial market, while highlighting the limited policy space available to developing countries when confronting policy shifts by nations holding a dominant position in the global financial system.