Ahead of the implementation of the Computer-Based Written Examination-National Selection Based on Tests (UTBK-SNBT), many high school class XII students experience quite high mental pressure.
Dr Widyastutik, IPB University Economics Expert believes that currently the United States (US) is showing its strength as a large country through its influence on global market prices. Trump views tariffs as a powerful tool to revive manufacturing and grow the US economy.
“Trump forgot the lesson learned from Trade War I, where the imposition of tariffs on China was relatively ineffective in reducing its trade balance deficit. Because the US domestic industry is unable to substitute imported products, the imposition of tariffs actually disrupts production and triggers inflation in the US,” she said.
The lecturer at the Department of Economics of IPB University revealed that the lesson learned from Trade War volume I with the recursive dynamic Global Trade Analysis Project (GTAP) model showed that the impact of the trade war on the US, Gross Domestic Product (GDP) fell by 0,23 percent in 2025 and fell more, namely 0,29 percent in 2030.
“China’s decline is greater, namely 0,55 percent in 2025 and 0,71 percent in 2030. The export and import performance of both countries is also predicted to decline,” explained the Secretary of the International Research Institute for Social, Economic and Regional Studies of IPB University.
On the other hand, she continued, as predicted by Cali (2018) and Lu (2020), Indonesia, Vietnam, and Thailand are predicted to benefit in the form of trade and investment relocation from the US and China.
Unlike WWI and WWII, currently the US imposes tariffs not only on China but on more than 180 countries. It is identified that China is subject to quite high tariffs through the USA Discounted Reciprocal Tariffs policy scheme of 34 percent and there are indications that it will increase as of April 10, 2025, 125 percent.
“The reciprocal tariff imposed by the US on Indonesia of 32 percent is relatively lower than peer countries, Vietnam and Thailand but higher than Malaysia, the Philippines, and Singapore,” she said.
What is the impact of Trump’s tariffs on Indonesia’s competitiveness?
Dr Widyastutik explained, interesting facts show that the dynamic performance of Indonesia’s leading export products to the US, proxied by Export Product Dynamics (EPD), experienced a significant shift in 2020-2023. Apparel and clothing accessories (HS 61) from Rising Star to Falling Star from 2022-2023.
Electronic products (HS 85) as well as fishery and marine processed products (HS 3 and HS 16) that were originally Rising Star have dropped to Retreat or even Falling Star. Products that previously did not have a strong position such as clothing (HS 62) and rubber (HS 40) were in the Lost Opportunity or Retreat position, turning into Falling Star.
“What does it mean? With Trump 2.0 tariffs, Indonesia’s superior products are increasingly losing competitiveness,” she said. However, she continued, compared to Chinese products, US tariffs on Indonesia are relatively lower.
“As with Trade War volume I, there are indications that Trade War volume II will cause the diversion of US imports from China to ASEAN countries. Facts in the field, US importers divert imports of Chinese products to Indonesia, one of which is furniture products,” continued Dr Widyastutik.
She emphasized that Vietnam is currently proposing negotiations with the US to be willing to offer import tariffs on US goods to Vietnam up to 0 percent. Vietnam’s action will certainly have the potential to increase the competitiveness of its products compared to Indonesian products.
As a way forward, she advised Indonesia to focus on more targeted bilateral diplomacy, optimizing export market diversification and utilizing Indonesia’s international trade cooperation fora.
“Long-term strategies also need to focus on improving product quality, technology investment, and strengthening competitiveness in the global market, not just imposing tariffs like Trump’s current tariff retaliation strategy,” she concluded. (dh) (IAAS/NVA)
