Trump's Tariffs: Why Indonesia Won't Be Spared

2 weeks ago 12

TEMPO.CO, Jakarta - United States President Donald Trump has imposed import tariffs on goods from Indonesia at 32 percent. The current tariff is reciprocal, as Indonesia also imposes tariffs on products from the U.S. that enter the country.

As a result of this policy, Indonesia becomes the eighth country with the highest import tariffs. So, why did Trump target Indonesia for increased import tariffs?

Reasons Indonesia is Affected by Trump's Tariffs

Based on his statement through the White House website on Wednesday, April 2, 2025, Trump mentioned the import tariffs on ethanol products from the U.S. as the reason, where Indonesia imposes a 30 percent tariff. He said that the tariff is much higher than that set by the U.S. government for similar products, which is 2.5 percent.

Trump also questioned the non-tariff policy. He highlighted the domestic content level (TKDN) policy in many sectors, complicated import licensing, and the program of Indonesian President Prabowo Subianto, which requires natural resource companies to deposit export earnings in domestic accounts.

In his statement, Trump said Indonesia applies local content requirements (TKDN) in various sectors, a complex import licensing regime, and starting this year, requires extractive companies to repatriate all export earnings for transactions worth US$250,000 or more.

Trump's tariff policy will be implemented gradually. The first phase is a 10 percent basic tariff for all countries, starting on Saturday, April 5, 2025. Then, special tariffs for several countries will start to be applied on Wednesday, April 9, 2025. This policy responds to the trade deficit with all U.S. trading partners, including Indonesia.

The objective of Trump's Tariff Implementation

Trump claimed reciprocal tariffs as the main reason why the people of the United States chose him in the general election. This policy became one of the programs he announced during the campaign.

The White House stated that people know Trump will push for it as soon as he returns to office. That's exactly what he promised, and that's the main reason he won the election.

Trump also referred to the new import tariffs as the core of his plan to restore the economy inherited from Joe Biden. He stated that he wants to position the United States on the path to a new golden era.

Moreover, the White House said this is built on a broader economic agenda, such as energy competitiveness, tax cuts, tariffs, no tax on social security benefits, and deregulation to enhance the prosperity of the United States.

Basis of Trump's Tariff Policy

Trump said that, based on several studies, import tariffs can be an effective tool to reduce national security threats and to achieve economic goals. For example, a study in 2024 found that import tariffs are claimed to strengthen the U.S. economy and increase the relocation of production to the home country.

Then, a report from the U.S. International Trade Commission analyzing tariffs on over US$300 billion found a decrease in imports from China and effectively stimulated more production of U.S. goods over the goods subjected to tariffs. Next, analysts from the Atlantic Council revealed that the tariffs would create new incentives for local consumers who want to buy products from the homeland.

Editor's Choice: The Impact of Trump's Tariffs on Developing Countries

Click here to get the latest news updates from Tempo on Google News

The Impact of Trump's Tariffs on Developing Countries

1 jam lalu

The Impact of Trump's Tariffs on Developing Countries

Lecturer and Researcher from UII Listya Endang mentions various impacts for both developed and developing countries after the imposition of Trump's tariffs.

Indonesia Secures Ticket to 2025 U-17 World Cup After 4-1 Triumph Over Yemen

10 jam lalu

Indonesia Secures Ticket to 2025 U-17 World Cup After 4-1 Triumph Over Yemen

Indonesia qualifiea for the U-17 World Cup after defeating Yemen 4-1 at the AFC U-17 Asian Cup.

Nintendo Delays U.S. Preorders for Switch 2 Over Tariff Concerns

12 jam lalu

Nintendo Delays U.S. Preorders for Switch 2 Over Tariff Concerns

Nintendo has announced the postponement of the pre-order period for Switch 2 in the United States, which was initially scheduled for April 9, 2025

AFC U-17 Asian Cup: Garuda Squad's Line-up Revealed Ahead of Yemen Match

13 jam lalu

AFC U-17 Asian Cup: Garuda Squad's Line-up Revealed Ahead of Yemen Match

In the U-17 Asian Cup between the IndonesiaU-17 national team and Yemen, coach Nova Arianto fielded the same lineup as when they defeated South Korea.

U.S. Reciprocal Tariffs Prompt Calls for Safeguards from Indonesian Manufacturers

13 jam lalu

U.S. Reciprocal Tariffs Prompt Calls for Safeguards from Indonesian Manufacturers

In addition to affecting export-oriented businesses, entrepreneurs depending on the domestic market are also worried about the impact of Trump's tariffs.

Malaysia PM Anwar Ibrahim Calls for a United ASEAN Against Trump's Tariffs

13 jam lalu