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Home World Middle East

Indonesia’s trade relations with the US impact its stance on Iran

23 March 2026
in Middle East
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When the United States and Israel launched “Operation Epic Fury” against Iran on February 28, 2026, resulting in the death of Supreme Leader Ayatollah Ali Khamenei, Indonesia’s response was notably restrained. The Indonesian government expressed “deep regret” but did not condemn the actions of Washington or Tel Aviv, nor did it offer official condolences from the presidential office. Former president Megawati Soekarnoputri stepped into the political void, personally extending condolences to Khamenei’s successor, illustrating a form of “shadow diplomacy.” Indonesia’s cautious approach is largely attributed to its recent economic alignment with the U.S., especially following the signing of the Agreement on Reciprocal Trade on February 19, 2026, designed to strengthen trade ties but limiting Indonesia’s foreign policy autonomy. This trade agreement requires Indonesia to significantly increase imports of U.S. energy, creating a dependency that constrains its diplomatic flexibility amid geopolitical tensions.

Why It Matters

Indonesia’s muted reaction to U.S. and Israeli military actions against Iran reflects its economic vulnerabilities and strategic shifts in foreign policy. The country is heavily reliant on the U.S. market for its labor-intensive sectors, with millions employed in industries like textiles and footwear. The signing of the Agreement on Reciprocal Trade came in response to economic pressures, including potential U.S. tariffs on Indonesian exports. This economic dependency influences Indonesia’s diplomatic stance, as critical responses to U.S. actions could risk losing favorable trade status and destabilizing its economy.

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Tags: ImpactIndonesiasIranrelationsStancetrade
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