Container ship preparing to dock in port during sunrise

USA-Indonesia Commerce: A Close Look at Trade Relations

USA-Indonesia Commerce: A Close Look at Trade Relations 1920 1280 Transmodal

For many years, the United States and Indonesia have maintained a significant bilateral trade relationship, engaging in a lively exchange of goods and services that has helped shape the economies of both nations. Despite being separated by vast geographical distances, these two countries have forged strong economic ties driven by their complementary needs and resources. Here, we delve into the main commodities and dollar values exchanged between the two nations. 

As of my knowledge cut-off in September 2021, the United States was one of Indonesia’s primary trading partners. Bilateral goods trade between the two nations totaled approximately $27.6 billion in 2020, according to the United States Trade Representative (USTR).  

Indonesia is rich in natural resources, many of which form the backbone of its exports. The top export categories from Indonesia to the United States include apparel ($1.5 billion), rubber ($920 million), coffee, tea & spice (mainly spice and coffee, $808 million), electrical machinery ($674 million), and furniture and bedding ($650 million). The burgeoning Indonesian textile industry, especially, has found a massive market in the U.S., given its capacity to offer high-quality garments at competitive prices. 

Meanwhile, U.S. exports to Indonesia stood at an estimated $7.3 billion in 2020. The U.S., as a technologically advanced nation, primarily exports machinery, aircraft, optical and medical instruments, and agricultural commodities. The top export categories from the U.S. to Indonesia include oilseeds and oleaginous fruits (mainly soybeans, $1.1 billion), machinery ($661 million), aircraft ($505 million), dairy products ($325 million), and electrical machinery ($279 million). 

While these numbers do indicate a vibrant bilateral trade scenario, it’s worth noting that there’s considerable potential to expand the trade volume further. From the U.S. perspective, Indonesia represents a rapidly expanding economy with a growing middle class, which could be a lucrative market for American products and services, ranging from technology to luxury goods. 

For Indonesia, the U.S. is not just a market for its goods but also a vital source of investment. In 2020, the stock of U.S. foreign direct investment (FDI) in Indonesia was $13.7 billion, directed at sectors such as mining, chemicals, and petroleum. 

As we navigate an evolving global economic landscape, the symbiotic relationship between the U.S. and Indonesia continues to grow in importance. The continued exchange of goods, services, and investments between these two nations stands as a testament to the power of global trade and its ability to bring distant nations closer together.