US-China Trade War: Impact on RI
- JAKARTA, Indonesia – The escalating trade war between the United States and China is raising concerns in Indonesia, with economists warning of potential repercussions for the nation's economy.
- President Donald Trump's decision to increase import tariffs on Chinese goods to 104%.
- Ahmad Tauhid, Executive Director of the Institute for Growth of Economics and Finance (Indef), told detikcom on Wednesday, April 9, 2025, that the trade war presents a significant...
Indonesia Braces for Impact as US-China Trade War Escalates
Table of Contents
JAKARTA, Indonesia – The escalating trade war between the United States and China is raising concerns in Indonesia, with economists warning of potential repercussions for the nation’s economy. China’s recent imposition of an additional 50% tariff on U.S. imports, bringing the total to 84%, is the latest salvo in the ongoing dispute. This action follows previous tariffs of 34%.
The move is a direct response to U.S. President Donald Trump’s decision to increase import tariffs on Chinese goods to 104%.
Economic Fallout for Indonesia
Ahmad Tauhid, Executive Director of the Institute for Growth of Economics and Finance (Indef), told detikcom on Wednesday, April 9, 2025, that the trade war presents a significant “alarm” for Indonesia. ”The export market to us, exports to China is even greater,” Tauhid said.”So that our economy is disturbed from the two sides. Two countries,to America,it will definitely go down,if China is an economy down,we are affected in our market.”
Tauhid cautioned that a sluggish global market coudl lead to a decline in commodity prices, subsequently reducing state revenue. “Moreover, the impact on commodity prices, this has begun to fall as of the two war countries (trade),” he explained. “The demand for commodity as our benchmark for state revenue. Such as from PNBP Migas, from commodities such as CPO, nickel, others automatically fall down state revenue down.”
Capital Market Concerns
The Indonesian capital market is also expected to feel the impact of the tariff war. Tauhid predicted a potential collapse of the Composite Stock Price Index (CSPI) as early as Thursday, April 10, 2025. “If the world economy goes down, (trade) the exchange goes down again. under 6,000. Surely that is. The weight of all companies with this situation,” he stated.
Tourism Sector Vulnerable
The tourism sector may also suffer due to the economic uncertainty caused by the trade war, perhaps affecting travel demand and ticket sales, according to tauhid. ”So,surely the service sectors must be disturbed like in Tourism,” he said.
Call for Strategic Approach
Samirin Wijayanto, an economist at Paramadina University, believes the U.S.-China trade war could trigger a prolonged global crisis. He emphasized the need for Indonesia to adopt a tactical approach with the U.S. while concurrently strengthening its domestic economy.
“Indonesia, along with taking a tactical approach with the US, it also needs to make various efforts to strengthen the domestic economy, to anticipate a prolonged global dynamics,” Wijayanto said.”In parallel, our cooperation with other countries needs to be strengthened; we must take advantage of the momentum of the feeling of the same fate as well as possible.”
Indonesia and the US-China Trade War: A Q&A Guide
WhatS Happening with the US-China Trade War?
Q: What’s the latest in the US-China trade war, and how is it affecting Indonesia?
A: The trade war between the United States and China is escalating.China recently imposed an additional 50% tariff on U.S. imports, bringing the total to 84%. This follows U.S. President Donald Trump’s decision to increase import tariffs on Chinese goods to 104%.The escalating trade war is raising serious concerns in Indonesia about the potential impact on its economy.
Q: How can indonesia be impacted by the US-China trade war?
A: the trade war impacts Indonesia in several ways:
Export markets: A sluggish global market could lead to decreased demand for Indonesian exports to both the US and China, potentially affecting economic activity.
Commodity Prices: The trade war can negatively impact commodity prices, which serve as a major source of state revenue for Indonesia.
Capital Markets: The Indonesian capital market (including the stock market) is also expected to feel the impact of the tariff war.
Tourism: The tourism sector may suffer due to the general economic uncertainty.
Economic Fallout in Indonesia
Q: What specific economic concerns does the trade war raise for Indonesia, according to experts?
A: Ahmad Tauhid, Executive Director of the Institute for Growth of Economics and Finance (Indef), views the trade war as a “significant alarm” for Indonesia. He emphasizes two primary concerns:
- Impact on Indonesian Exports: Indonesia’s export markets will be impacted. “The export market to us, exports to China is even greater,” Tauhid stated.
- Commodity Price Decline: the decreased demand due to the trade war could lead to a drop in commodity prices, directly impacting state revenue.
This decline impacts revenue from sources like oil and gas (PNBP Migas), and key commodities such as crude palm oil (CPO) and nickel.
Q: How could the trade war affect Indonesia’s state revenue?
A: The drop in commodity prices due to reduced global demand, triggered by the trade war’s impact on economic activity, could cause a decline in Indonesia’s state revenue. Commodity revenues, including income from oil and gas and items like CPO and nickel, are a major source of budget income.
Impact on Capital Markets and Tourism
Q: Is the Indonesian capital market at risk?
A: Yes.Experts predict potential negative impacts on the Composite Stock Price Index (CSPI).Ahmad Tauhid predicted a potential collapse of the CSPI as early as Thursday, April 10, 2025, due to the impact of the trade war on the global economy.
Q: How might the tourism sector be impacted by the trade war?
A: The tourism sector is also vulnerable. The economic uncertainty caused by the trade war could decrease travel demand and ticket sales, negatively impacting the service sector, according to Tauhid.
Indonesia’s Response: Strategic Approach
Q: What steps should Indonesia take in response to the escalating trade war?
A: samirin Wijayanto, an economist at Paramadina University, believes Indonesia should adopt a dual approach:
Tactical Approach with the U.S.: Indonesia needs a strategic, nuanced approach in its dealings with the United states during this trade dispute.
Strengthening the Domestic Economy: The nation must concentrate on bolstering its internal economic resilience.
Strengthen Cooperation with Other countries: Leverage the situation by building and solidifying relationships with other nations. “We must take advantage of the momentum of the feeling of the same fate and also possible,” Wijayanto recommends.
Q: Can you summarize the expected economic impacts of the trade war on Indonesia in a table?
A: Certainly. Here’s a summary of the potential effects based on the provided data:
| Sector | Potential Impact | Specific Concern |
|---|---|---|
| Exports | Decline | Reduced demand from China and the US. |
| Commodity Prices | Decrease | Lower global demand leads to falling prices. |
| State Revenue | Reduction | Lower commodity revenues,including from resources such as Oil,CPO and Nickel |
| Capital Markets | potential Decline | CSPI could experience a drop. |
| Tourism | Negative impact | Reduced travel demand. |