Trump Sets 32 Percent Import Tariff for Indonesia

WASHINGTON DC, THURSDAY - Earlier than the initially reported schedule, on Wednesday evening (2/4/2025) Washington time, or Thursday morning (3/4/2025) Jakarta time, the President of the United States, Donald Trump, announced a list of base tariffs and import duties on many of the country's trading partners. Trump referred to the day the announcement was made as "Liberation Day." Indonesia was not spared from the impact of this "Liberation Day."

In the list presented, Indonesia was subjected to a reciprocal tariff of 32 percent. "In many cases, especially in terms of trade, friends are worse than foes," said Trump while announcing the policy at the White House. "We subsidize many countries and enable them to do business and thrive," he continued.

"Why are we doing this? I mean, when can we say you have to work for yourselves... We are finally putting America first," said Trump. According to him, the trade deficit is no longer merely an economic issue. The deficit, Trump stated, is a national emergency, while holding up a board listing the countries and the new tariffs imposed by the U.S. on them.

"It's our declaration of independence," Trump said from the White House Rose Garden.

The tariff rate imposed on Indonesia differs by only 2 percent from China, the "tough competitor" of the US, which stands at 34 percent. Two ASEAN countries, Thailand and Vietnam, also face significant tariff "pressures," amounting to 36 percent and 46 percent, respectively.

Referring to the official website of the Ministry of Trade of the Republic of Indonesia, the United States is indeed a contributor to the national non-oil and gas trade surplus in 2024. Indonesia's trade surplus with the United States amounts to 16.08 billion US dollars out of the total non-oil and gas trade surplus in 2024, which stands at 31.04 billion US dollars. Indonesia's non-oil and gas exports to the United States include garments, electrical equipment, footwear, and vegetable oil.

Before announcing the new reciprocal tariff rates, Trump had imposed a 20 percent import duty on all products imported from China. He had also imposed a 25 percent import duty on steel and aluminum exported to the United States.

The world is expected to react soon to Trump's move. Before the announcement, manufacturing activity around the world was reported to have slowed. Financial markets were volatile as investors awaited Trump's announcement.

Close US partners the European Union and Canada are preparing to retaliate, with the EU facing a 20 percent tariff.

So far, the European Union and Canada have expressed their readiness to retaliate against Trump's policy. "We will fight for the Canadian economy," Prime Minister Mark Carney said.

The European Union, which Trump has accused of hurting the US economy, said it was ready to talk but was preparing retaliatory measures against US tariffs if they go ahead. British Prime Minister Keir Starmer said he had productive talks with Trump.

Matthew Luzzetti, an economist at Deutsche Bank, Germany's leading bank, said that if Liberation Day is a dead end for tariffs, the impact of the global uncertainty it triggers will reduce economic growth by at least 1 percentage point for the next few quarters. "If this uncertainty continues, the impact will be multiplied," Luzzetti said.

(AP/AFP/Reuters)