Trump's Impact, US Market Loses Value Equivalent to Two Years of Indonesia's GDP

NEW YORK, FRIDAY—The United States stock market has lost a valuation equivalent to Indonesia's gross domestic product over the course of two years. This loss reflects market anxiety over Donald Trump's decision regarding import tariffs for all trading partners of the United States.

At the close of trading on Thursday (3/4/2025) evening New York time or Friday morning WIB, all major indexes of the US stock exchange were in the red. The S&P 500, Dow 30, and Nasdaq plunged 4.84 percent, 3.98 percent, and 5.97 percent respectively.

The valuation of S&P 500 issuers was estimated to shrink by 2.9 trillion US dollars throughout Thursday. As a comparison, Indonesia's 2024 gross domestic product is equivalent to 1.439 trillion US dollars. Thus, the decline in the S&P 500 valuation exceeds Indonesia's GDP for two years.

Bloomberg billionaires index said the world's 500 richest people lost $208 billion in assets due to stock declines. Elon Musk, the world's richest person and a major Trump supporter, lost $11 billion as his company's shares plunged after Trump's decision.

Dow Jones Market Data recorded that the US stock market last experienced a decline this severe in March 2020. At that time, the Covid-19 pandemic began.

The market has now plummeted following the announcement by U.S. President Donald Trump regarding U.S. international trade. Trump decided that commodities from almost all U.S. trading partners would be subject to import tariffs.

In fact, Lesotho was subjected to a 50 percent BMI by Trump. Yet, the export value of the African country to the entire world was only 831 million US dollars in 2023.

Although the market is in decline, Trump insists that his decision will have a positive impact. "The market will improve, stocks will soar, and the country's (economy) will get better," said Trump.

He stated this when the main indices of U.S. stock markets plummeted. According to him, the U.S. is like a sick patient in need of surgery to restore its health. BMI is Trump's way of reviving the U.S. economy. "Everything will be fine," he said.

The imposition of a high BMI, he said, would force companies to invest in the US to access the country's market. He is ready to lower the BMI rate. The condition is that other countries must make extraordinary offers. "For years, we have been on the wrong side," he said.

He referred to the US balance of trade in goods and services. In 2024 alone, the US will suffer a deficit of 1.063 trillion US dollars. From the trade in goods, the deficit is 1.294 trillion US dollars. From the trade in services, the surplus is 231 billion US dollars.

The deficit, according to Trump, is because the US is being cheated by various countries. Therefore, allies and opponents are subject to BMI. The lowest is 10 percent.

Investors have been preparing for BMI to enter the US market for the past few weeks. However, the market suspects that the policy is only a short-term tactic to push trade talks.

With his latest statement, Trump indicated that BMI is a long-term strategy. This has sparked market concerns.

The U.S. industrial and consumer supply chain has long relied on production from other countries. The U.S. Department of Agriculture has acknowledged that the U.S. is losing domestic capacity to produce and distribute many foods.

Bananas and avocados are just a few of the commodities that rely almost entirely on imports. While other goods can be reduced in price because they are produced in other countries that have cheaper production costs than the US.

Federal Reserve Board of Governors member Lisa Cook said that Trump's policies will trigger inflation in the US. While economic growth will slow.

The combination of the two will make it difficult for the Federal Reserve or The Fed, to formulate monetary policy. Usually, central banks like The Fed will raise interest rates to dampen inflation. The problem is, the increase in SBA can also dampen economic growth.

Credit will be expensive as interest rates rise. Meanwhile in the US, consumption and investment rely on credit.

BMI, Cook said, will ultimately be borne by consumers. He cited BMI for aluminum and steel, staples in the automotive industry.

The increase in aluminum and steel BMIs has caused car prices in the US to rise. "Higher prices on motor vehicles can raise costs for related services such as rentals, insurance, and repair shops," he said. (AP/AFP/REUTERS)