Indonesia finds itself walking a diplomatic tightrope as US President Donald Trump renews threats of a trade war against BRICS nations over perceived challenges to the supremacy of the US dollar. With tariffs of up to 100 percent looming for countries contemplating alternative currencies, Jakarta has moved swiftly to clarify its stance, emphasising that it has no interest in replacing the greenback despite its recent membership in the BRICS grouping.
The issue of de-dollarization—reducing reliance on the US dollar in international trade—has simmered within BRICS, an alliance of emerging economies including Brazil, Russia, India, China, and South Africa, for years. Founded as a counterweight to Western-dominated financial systems, the group has often discussed alternative currency mechanisms as a means of asserting economic autonomy. Trump, however, has taken a hardline approach, vowing in a recent social media post to “require a commitment” from BRICS countries to abandon any plans for alternative currencies. His “America First” agenda casts such moves as direct threats to US economic hegemony, prompting warnings of punitive tariffs and trade penalties.
Indonesia, which officially joined BRICS on 6 January 2025, has been quick to distance itself from the de-dollarization debate. “As far as we understand, the issue of de-dollarization was discussed among BRICS members in its early days and ahead of Indonesia’s membership, and it was still only a plan,” Foreign Ministry spokesperson Rolliansyah “Roy” Soemirat told reporters on Friday. “What is clear is that when Indonesia joined BRICS, it did so with a clear statement that it was not interested in the issue of de-dollarization.” 
A Measured Approach to BRICS Engagement
Indonesia’s entry into BRICS reflects a broader ambition to amplify the voice of the Global South in international affairs. The country has joined approximately 58 working groups within the organisation, focusing on issues such as economic cooperation, sustainable development, and addressing disparities faced by developing nations. Roy stressed that Indonesia’s participation is measured and pragmatic, aimed at fostering collaboration rather than confrontation.
This stance was echoed by presidential foreign affairs spokesperson Philips J. Vermonte during a discussion hosted by the Foreign Policy Community of Indonesia (FPCI) in South Jakarta last week. “Indonesia is not antagonising the US, but developing more cooperation with those countries that are catching up,” Vermonte said. He urged developed nations not to view Indonesia’s BRICS membership as a challenge, but rather as an effort to build bridges between emerging economies and the global order.
Former ambassador to the US, Soemadi Brotodiningrat, also highlighted the strategic value of BRICS for Indonesia. Speaking at the same FPCI event, he described the grouping as “one of the vehicles, not the only platform, we can use to defend our interests” in an increasingly polarised world. For a nation like Indonesia, which prides itself on a non-aligned foreign policy, multilateral forums like BRICS offer additional avenues to negotiate national priorities without being tethered to any single power bloc.
The De-Dollarization Debate and US Pressure
The concept of de-dollarization has gained traction among some BRICS members as a response to what they perceive as an “unjust” global monetary system, where the US dollar’s dominance often translates into economic leverage for Washington. Proposals for alternative currencies or trade mechanisms using local currencies have been floated in past BRICS summits, though no concrete framework has emerged. For countries like Russia and China, reducing reliance on the dollar is also seen as a buffer against US sanctions and financial restrictions.
Indonesia, however, has consistently framed its grievances with the global financial system in diplomatic terms. While acknowledging systemic inequities, Jakarta has stressed that its BRICS membership is not a rejection of Western partnerships. Instead, it positions the group as a platform for “South-South cooperation,” ensuring that the aspirations of developing nations are reflected in global decision-making.
Trump’s latest threats add a layer of complexity to Indonesia’s balancing act. His pledge to impose steep tariffs on BRICS nations pursuing de-dollarization initiatives could have significant economic repercussions, particularly for export-driven economies like Indonesia. The country’s trade ties with the US remain substantial, with American markets accounting for a notable share of Indonesian exports such as textiles, electronics, and palm oil. A potential trade war could disrupt these flows, raising costs for businesses and consumers alike.
Broader Implications for BRICS and the Global South
The tension between the US and BRICS over currency dominance underscores a deeper struggle over the future of the global economic order. For decades, the US dollar has served as the world’s primary reserve currency, underpinning international trade and finance. This status grants Washington unparalleled influence, from shaping monetary policies to enforcing sanctions through control over global banking systems like SWIFT. Challenges to this system, even if speculative, are viewed by the US as existential threats to its economic power.
For BRICS nations, the push for alternatives—whether through local currency trade or digital payment systems—represents a bid for greater sovereignty over their economic destinies. Yet, the group’s diversity means consensus on such matters is often elusive. While Russia and China may champion de-dollarization, newer members like Indonesia appear more cautious, prioritising stability and existing trade relationships over radical shifts.
If Trump’s threats materialise into policy, the fallout could extend beyond BRICS to other emerging economies watching from the sidelines. Tariffs and trade barriers might deter countries from aligning with BRICS or similar initiatives, reinforcing the status quo of dollar dominance. Conversely, sustained US pressure could galvanise greater unity among Global South nations, accelerating efforts to diversify away from dollar-centric systems. Such outcomes remain speculative, and as of now, no evidence confirms that BRICS has a unified or imminent plan to launch an alternative currency.
Indonesia’s Path Forward
As it navigates these choppy waters, Indonesia’s foreign policy establishment seems intent on maintaining its hallmark neutrality. The country has long adhered to the principle of “bebas dan aktif” (free and active), avoiding entanglement in great power rivalries while actively engaging with diverse partners. Its approach to BRICS reflects this ethos—seeking benefits from membership without endorsing agendas that could strain ties with the US or other Western powers.
Analysts suggest that Jakarta’s reluctance to engage in de-dollarization aligns with its economic realities. The US dollar remains integral to Indonesia’s trade and financial transactions, and any abrupt shift could destabilise markets or invite retaliation. At the same time, participation in BRICS offers opportunities to diversify economic partnerships, particularly with fast-growing economies like India and China, which could help buffer against external shocks.
For now, Indonesia’s message is clear: it seeks collaboration, not confrontation. Whether this stance will shield it from the broader geopolitical currents surrounding BRICS and US policy remains to be seen. As Trump’s rhetoric sharpens and global economic divides deepen, Jakarta’s diplomatic agility will be put to the test, balancing its aspirations for Global South solidarity with the pragmatic need to maintain cordial relations across the Atlantic.
In a world increasingly defined by economic nationalism and competing visions of global order, Indonesia’s journey within BRICS may serve as a litmus test for how emerging powers can carve out space for themselves without being caught in the crossfire of superpower rivalries. For the moment, Jakarta stands firm in its commitment to cooperation over conflict, hoping to chart a path that benefits its people without alienating its partners.
