<![CDATA[Aceh Province faces an economic paradox characterized by a high surplus in raw commodity exports while simultaneously experiencing a chronic domestic trade deficit due to dependence on external supply chains. This study aims to formulate policy interventions to overcome logistical inefficiencies and trade distortions that stifle the competitiveness of local Small and Medium Industries (SMIs) and trigger a high-cost economy. Utilizing a qualitative approach with a case study design, primary and secondary data were analyzed using the Fishbone diagram, IFE-EFE matrices, TOWS matrix, and William Dunn’s evaluation method. Diagnostic results indicate that Aceh's trade ecosystem lies in Quadrant III, necessitating a Turnaround strategy. Among the three evaluated policy alternatives the development of physical consolidation centers, local state-owned enterprise (BUMD) intervention, and affirmative regulation the analysis proves that regulatory intervention is the most efficient and structurally impactful choice. Therefore, this policy paper recommends the issuance of a Gubernatorial Regulation on Domestic Trade, mandating a minimum 30% absorption of local SMI products in modern retail markets. This policy serves as a concrete measure to disrupt external oligopoly domination, provide market certainty for grassroots producers, prevent capital flight, and manifest equitable regional economic sovereignty. Keywords: Trade System, Trade Deficit, Integrated Logistics, High-Cost Economy, Affirmative Policy, Aceh SMIs.]]>
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