Indonesia's trade envoy says the answer to tariffs is buffers, not walls

Big economies now use trade as a weapon, and the question for Indonesia is what to do about it. Mari Elka Pangestu, President Prabowo's special envoy for international trade and a former trade minister, gave her answer in an interview with Fulcrum, the news site of Singapore's ISEAS research institute. She calls it "openness with shock absorbers": keep trading, but build protection against the shocks. Her list of what Southeast Asia is up against is specific: the Hormuz oil crisis earlier this year, the widening of America's Section 301 tariffs, a law Washington uses against trade it calls unfair, and China's export controls on critical minerals. "Export controls" means a government stopping its own firms from selling certain goods abroad, which can leave a factory in Java waiting for parts it has already paid for. If the region does not set its own terms, she says, "others will define it for us".

What she wants is practical rather than grand. Energy comes first: a shared regional power grid, joint fuel stockpiles, and buying from suppliers as a bloc rather than one country at a time. Two frameworks for that already exist on paper, the ASEAN Power Grid and the Trans-ASEAN Gas Pipeline. For investors she asks for one agreed list of what counts as a green project, plus clear rules for green bonds, because "capital follows credible frameworks". Where the whole bloc cannot agree, she would let the willing members start and the rest join later.

She is blunt about the weak part. There is no plan for one regional authority, and coordination here means little more than sharing information and agreeing on priorities. Poorer members risk ending up as "bystanders" while supply chains move around them. Her sharpest line is aimed at ASEAN itself: "centrality without substance is just geography."

Why it matters

The next oil or minerals shock will reach you as a fuel price, a delayed order, or a factory shift that disappears, and this interview is a preview of how Jakarta plans to absorb it. Watch whether Indonesia's actions at home match what its envoy argues abroad, because stockpiles and shared grids take years to build and cost money the budget is already short of. If you export, the green-finance rules she wants would decide which banks will lend to you and at what price.