Trump's Tariffs Rattle Indonesia: IHSG and Rupiah Under Pressure

6 days ago 5

Stock Illustration or JCI Illustration. ANTARA PHOTOS/Galih Pradipta

TEMPO.CO, Jakarta - The Composite Stock Price Index (IHSG) is likely to face heavy pressure following U.S. President Donald Trump’s decision to impose a 10 percent import tariff on all countries, starting April 5, 2025.

Several nations, including Indonesia, are responding with retaliatory tariffs. Indonesia is subject to tariffs reaching as high as 32 percent.

Capital market analyst from Kiwoom Sekuritas, Oktavianus Audi, predicts the IHSG will trend downward, with support at 6,150 and resistance at 6,660.

“Although the short-term trend appeared strong before the market holiday, Trump’s tariff policy will cast a shadow over the market in the near term,” he said on Friday, April 4, 2025.

The market's concern, according to Audi, is not only triggered by the potential global economic slowdown but also by the risk of a decrease in Indonesia's trade surplus and pressure on the exchange rate of the rupiah.

He added that Indonesia's trade surplus with the U.S., which reached US$16.84 billion or about 54 percent of the total surplus in 2024, is now threatened to erode due to Trump's protectionist policies.

In addition, the weakening of several regional indices indicates a spreading negative sentiment.

"Nikkei corrected by 3.07 percent, the HNX Vietnam index plummeted by 6.91 percent, and even the US500 futures contract also fell by up to 2.8 percent," said Audi.

According to him, the market is now waiting for concrete steps from the Indonesian government to mitigate the impact of these policies. Diversifying export markets, providing incentives to local industries, and accelerating downstream efforts are seen as urgent strategies that need to be implemented.

The 32 percent import tariff imposed by the President of the United States, Donald Trump, on April 2, 2025, is considered to pose a major challenge to the Indonesian economy. With higher tariff burdens, currency observer Ibrahim Assuabi said that the national export competitiveness to the U.S. market is guaranteed to weaken.

"This policy not only hits Indonesia's exports to America but also contributes to the depreciation of the rupiah. This week, the rupiah could open at the level of Rp16,900, and even potentially break through Rp17,000 per U.S. dollar," said Ibrahim, on Thursday, April 3, 2025.

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