Two global powers are redrawing the map of influence, BRICS and the United States. One is a coalition of emerging economies pushing for a new economic order, while the other continues to assert its influence through finance, diplomacy, and trade pressure.
BRICS, originally an acronym for Brazil, Russia, India, China, and South Africa, is a bloc formed to promote economic cooperation among major non-Western economies. In recent years, BRICS has expanded into BRICS+, opening doors to new members like Egypt, Ethiopia, and, as of January 2025, Indonesia.
On the other side, the United States remains the world’s most powerful single economy. But its dominance is increasingly challenged, not just by China, but by collective action from Global South countries seeking alternatives to dollar-based systems and Western institutions.
Why Indonesia Joined BRICS: A Strategic Move, Not a Rebellion
Indonesia’s membership in BRICS, formalized on 6 January 2025, marks a historic turning point. But it is not an act of rebellion against the West, it’s a calculated step toward broadening economic alliances and reducing over-dependence on any one bloc.
BRICS offers Indonesia access to alternative development financing, more equitable trade arrangements, and a stronger voice among fellow emerging markets.
For a country long committed to the principle of “bebas aktif” in its foreign policy, joining BRICS is less about shifting loyalties and more about strategic diversification.
The Trump Tariffs: A Pattern, Not a Surprise
Indonesia wasn’t the only country hit by new tariffs. Under President Donald Trump’s renewed trade strategy, several countries faced threats of steep import taxes, meant to pressure them into large purchase commitments from the U.S.
Deals were quickly arranged with the UK, Viet Nam, and China to avoid or reduce these tariffs. Indonesia followed a similar path: after initial warnings of a 32% tariff, a trade agreement was struck that lowered the tariff to 19%.
In return, Indonesia agreed to buy:
- US$15 billion in U.S. energy
- US$4.5 billion in agricultural products
- 50 Boeing jets, many of them 777s
The tariff might have been reduced, but the message was unmistakable: participation in BRICS comes at a diplomatic price, especially when it’s seen as moving away from U.S.-centric trade systems.
ASEAN and the Regional Recalibration
Indonesia isn’t alone in adapting to this new world order. Across Southeast Asia, countries are rebalancing their economic relationships and gradually exploring mechanisms that lessen dependency on the U.S. dollar.
Malaysia, Thailand, and the Philippines are also engaging in bilateral currency settlements, joining Indonesia and China’s existing local currency trade deals. While ASEAN hasn’t taken a collective stance, the region is moving towards strategic hedging, balancing both East and West while keeping autonomy intact.
For Indonesia, joining BRICS doesn’t mean rejecting old partners. It means expanding its options.
Can the Dollar Stay on Top?
In early 2025, JP Morgan CEO Jamie Dimon warned that the U.S. dollar might lose its status as the global reserve currency within 40 years. His reasoning was simple: if U.S. global leadership weakens, so will confidence in its currency.
BRICS, meanwhile, is laying the groundwork for de-dollarization, promoting trade in local currencies and developing digital financial infrastructures. While these moves are symbolic for now, their political message is loud and clear.
No currency has yet matched the dollar’s reach and liquidity. But BRICS doesn’t need to dethrone it overnight. The goal is to reduce risk from being overly exposed to one system.
Southeast Asia's Smart Playbook
Rather than pick sides, countries like Indonesia are adopting a smarter strategy: adapt, engage, and prepare for volatility. This is not a passive stance, but a deeply pragmatic one.
The days of a single global economic model may be over. In this more complex, multipolar world, Indonesia’s strength lies in not being easily swayed, but in steering its own course.
What’s Next for Indonesia?
By joining BRICS and navigating tariff negotiations with the U.S., Indonesia has proven that diplomacy is not always about choosing sides, it’s about expanding leverage.
Indonesia’s path is not about being caught between powers, but about mastering the space in between.
