This report presents the results of a GTAP version 7 simulation using the GTAP Database version 11 for the scenario of the United States’ reciprocal tariffs on Indonesia.
Two scenarios were simulated:
(1) Indonesia does not engage in negotiations and is therefore subject to a 32% tariff; and
(2) Indonesia grants a 0% import tariff to the United States, leading the U.S. to impose a 19% tariff.
The simulation employs a short-run closure with fixed real wages and applies tariff conditions as of mid-September 2025, when Brazil and India faced potential 50% tariff threats. The results indicate that a 19% tariff (Scenario 2) yields higher GDP and employment growth compared to the 32% tariff (Scenario 1). Nonetheless, negotiations with the United States remain ongoing, and further studies are required to produce more precise estimates. Despite these limitations, the findings can serve as a reference in analyzing the potential impact of U.S. reciprocal tariffs and Indonesia’s strategic policy options.
DEN Working Papers is a repository of ongoing studies conducted by Experts and Members of the National Economic Council. Publications in this repository aim to foster constructive and scholarly discussion among observers of Indonesia’s economic policy. The views expressed in these papers do not necessarily reflect the official position of the National Economic Council.
For citation:
Gupta, Krisna, Arief Anshory Yusuf, M. Hafizh Ghifari Azizi, and Shakuntala Anjani Nindraswari. 2025. “Simulation of the Impact of U.S. Reciprocal Tariffs on the Indonesian Economy Using the GTAP Model.” DEN Working Papers No. 1/2025.
