Why Trump Imposed Reciprocal Tariffs and How They Will Affect Indonesian Exports
Reporter
April 3, 2025 | 08:57 pm
TEMPO.CO, Jakarta - The global trade war has escalated to a new level following U.S. President Donald Trump's announcement of import tariff policies on Wednesday, April 2, 2025. He introduced a minimum 10 percent tariff on all imports to the U.S., affecting goods from every country.
Additionally, Trump imposed higher retaliatory tariffs on select trading partners, including Indonesia.
“Reciprocal. That means they do it to us, and we do it to them. Very simple. Can’t get any simpler than that,” he added. “We will charge them approximately half of what they are and have been charging us… So, the tariffs will not be fully reciprocal.”
"Reciprocal, that means they (trading partner countries) apply it to us and we apply it back to them," Trump said at the White House on Thursday, April 2, 2025 as reported by Time and Euronews.
Additional tariffs were also imposed on a number of countries considered to have a trade surplus with the U.S.
The tariffs vary, for example Indonesia, which was imposed a 32 percent tariff, and Vietnam, 46 percent. Then China 34 percent and the European Union 20 percent.
Senior economist at Paramadina University, Wijayanto Samirin, believes that the reason for this controversial policy is to save the U.S. fiscal.
Trump is seen as desperate about the fiscal condition in his country, thus imposing high tariffs on all countries.
Wijayanto believes that the president of the Republican Party will do anything to generate additional income.
"No matter whether it is a big country or a small country with a vulnerable economy, Trump is trying to press and profit," said Wijayanto.
According to Wijayanto, there will be several negative impacts domestically. This is because Indonesia's exports to the U.S. are dominated by labor-intensive industrial products such as shoes, textiles and textile products (TPT), rubber products, electrical equipment, and electronics.
"Thus, the pressure of layoffs will become stronger."
Meanwhile, the Director of the Indef Program, Eisha Maghfiruha Rachbini, stated that Indonesia's average annual market share of exports to the U.S. is 10.3 percent. This market share is the second largest after Indonesia's exports to China.
The imposition of additional tariffs on Indonesian products will directly impact the significant decline in Indonesia's exports to the U.S. Leading commodity exporters will incur high costs.
"The impact is the slowdown of production and employment opportunities," said Eisha.
The Central Statistics Agency reported in February 2025 that Indonesia experienced a trade surplus with several countries, with the highest surplus being with the U.S.
Meanwhile, Indonesia's non-oil and gas exports to the U.S. in February 2025 reached US$2.35 billion. This figure is an increase from February 2024 which was US$2.1 billion.
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