The escalating global trade war has raised concerns about international economic partnerships, including the relationship between Indonesia and Australia. Jennifer Westacott, Australia's Business Champion for Indonesia, highlighted the importance of strengthening economic cooperation between the two nations amidst global uncertainty.

The Impact of Trade War on Indonesia-Australia Relations

The United States has implemented tariffs on key imports, such as steel and aluminum, affecting Australia's trade. Unlike Australia, Indonesia has not been directly targeted by these tariffs. However, the broader implications of the trade war could still impact Indonesia’s economic interactions with Australia.

According to Westacott, Indonesia and Australia must focus on aspects within their control to ensure economic stability. Strengthening trade agreements and investment partnerships is essential to mitigate the risks posed by global trade disruptions.

Australia’s Business Delegation Strengthens Investment in Indonesia

To reinforce economic ties, Westacott led a high-level Australian business delegation to Jakarta in February 2025. This delegation included 39 senior representatives from 27 major companies, covering sectors such as infrastructure, healthcare, logistics, mining, and energy.

During the visit, the delegation engaged in business meetings with Indonesian government officials and industry leaders. Their goal was to explore new investment opportunities and deepen economic collaboration between the two nations.

Future Prospects for Indonesia-Australia Trade Cooperation

Despite trade tensions, Indonesia and Australia continue to seek economic opportunities. Indonesia's application to join the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) in 2024 signifies its commitment to expanding trade networks. This move aligns with its broader economic reform strategy.

Additionally, both countries see potential in sectors such as nickel and aluminum. Indonesia’s growing nickel industry plays a crucial role in electric vehicle (EV) battery production, while Australia remains a key player in aluminum exports. Enhanced cooperation in these industries could benefit both nations and strengthen their economic resilience.

Conclusion

The Indonesia-Australia economic partnership remains crucial amid global trade tensions. By focusing on strategic investments, trade agreements, and industrial collaboration, both nations can navigate economic uncertainties and foster long-term growth. Strengthening bilateral ties will be key to ensuring mutual prosperity in the years ahead.