TEMPO.CO, Jakarta - Lecturer and Researcher at the Islamic University of Indonesia (UII), Listya Endang Artiani, believes that the decision of United States (US) President Donald Trump to impose new import tariffs will cause significant impacts on the global economy.
Listya stated that Trump's tariffs could lead to tensions among major countries and affect the economies of developing countries that rely on free trade.
"This policy has the potential to disrupt the balance of international trade, increase economic uncertainty, and affect the economies of developing countries dependent on free trade," Listya Endang said in a written statement received by Tempo on Sunday, April 6, 2025.
According to Listya, Indonesia, being one of the trading partners of the US, will also be affected as Trump has set a reciprocal tariff of 32 percent. This tariff is only slightly lower than that imposed on China, which is 34 percent, and higher than other ASEAN countries such as Thailand and Vietnam, which face tariffs of 36 percent and 46 percent, respectively.
Although the tariff is seen as part of Trump's protectionist strategy, Listya said that this policy has created a stir in the global market, with predicted economic growth reduction of up to 1 percent due to the uncertainty it has caused. Economists warn that this uncertainty could further worsen global economic prospects if it persists.
"The US's trading partners such as the European Union and Canada have prepared retaliatory measures against this policy, while the US remains focused on its domestic economic priorities," said the lecturer at the Faculty of Business and Economics at UII.
Listya stated that Indonesia's position in this policy becomes even more significant, given its impact on industries dependent on the import and export of goods with the US. Indonesia is recognized as a contributor to non-oil trade surplus with the US amounting to 16.08 billion US dollars in 2024, with key exports such as garments, electrical equipment, footwear, and vegetable oil.
Furthermore, Listya explained that in the context of the theory of international trade, particularly the theory of comparative advantage by David Ricardo, free trade should allow each country to focus its production on the most efficient and profitable goods. Through this mechanism, countries can mutually benefit by exchanging goods produced with the highest relative efficiency.
"However, the tariff policy implemented by the United States contradicts this principle, hindering freer trade flows and harming trading partners engaged in a relatively open global trading system," said the Economics lecturer at UII.
On the other hand, the import tariff policy implemented by the US can be seen as a protectionist strategy to reduce competition from other countries and to protect domestic industries from external threats. This policy aligns with a protectionist approach, as explained by Friedrich List, highlighting how a country can protect its domestic industries from excessive global competition.
"In this context, the tariff policy prioritizes US domestic interests, potentially at the expense of trade relations with other countries, including Indonesia," Listya said.
This UII researcher argued that globally, protectionist policies seem to be gaining momentum, especially following the start of the trade war between the US and China. This phenomenon indicates a significant shift in the pattern of international trade relations, where major countries tend to prioritize more closed policies based on national interests.
According to Listya, the developing protectionism not only concerns tariff policies but also includes strict regulations on imports and unfair subsidy policies. This exacerbates trade tensions in an increasingly complex world full of economic rivalries. The victims are developing countries that still depend on open international market access.
"The import tariff policy implemented by the US raises a critical question: is this a fair trade strategy aimed at balancing competition between countries, or is it a form of protectionism that harms trading partners such as Indonesia?" Listya pondered.
Previously, Trump officially imposed new import tariffs, also known as Trump's tariffs, which shook the global market. Through an Executive Order announced on "Liberation Day" in the Rose Garden of the White House, Trump set a basic tariff of 10 percent for almost all countries, with higher tariffs imposed on about 60 countries deemed to have the "most unfair" trading relationship with the US.
Trump's tariffs are generally imposed on nearly all countries trading with the US. Countries such as Singapore, the UK, and several others fall into this category. The 10 percent tariff is likely considered as the initial or "standard" tariff imposed to create greater equality in global trade relations.
According to a US official who briefed reporters before the official announcement, goods imported from about 60 countries will face tariffs above 10 percent. Documents distributed to reporters showed several reciprocal tariffs set, including a 34 percent tariff for goods from China, 20 percent for the European Union, 46 percent for Vietnam, and 44 percent for Sri Lanka.
Sita Planasari, Ida Rosdalina, and Myesha Fatina Rachman contributed to the writing of this article.
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