Expert's Suggestions to Mitigate Impact of Trump's 32% Tariff on Indonesia

TEMPO.CO, Jakarta - Observers believe that the 32 percent import tariff policy announced by U.S. President Donald Trump on April 2, 2025, could present a major challenge to Indonesia's economy.

Currency expert Ibrahim Assuabi noted that the increased tariff burden could weaken the nation's export competitiveness in the U.S. market.

Ibrahim emphasized the need for the government to implement strategic measures to minimize the policy's impact.

"This move not only affects Indonesian exports to the U.S. but also contributes to the weakening of the rupiah. The rupiah could open at around Rp16,900 this week, possibly reaching Rp17,000 per U.S. dollar," said Ibrahim on Thursday, April 3, 2025.

In addition, the Composite Stock Price Index (IHSG) is also predicted to correct by 2 to 3 percent in the next Monday's trading. Ibrahim believes that if the government does not act immediately, the pressure on the domestic economy could increase further.

To face the impact of this trade war, Ibrahim emphasizes that the government needs to take concrete and fast steps as follows:

1. Imposing Retaliatory Tariffs on U.S. Products

The government could apply a 32% import tariff on U.S. products, matching the U.S. policy. This would signal Indonesia's stance against U.S. protectionism.

2. Exploring Alternative Markets in BRICS Countries

With reduced export access to the US, the government needs to strengthen cooperation with BRICS countries (Brazil, Russia, India, China, and South Africa) and expand market share to the Middle East, Africa, and Latin America.

3. Injecting Economic Stimulus

The government must immediately issue stimulus policies to maintain public purchasing power and support industries affected by the decline in exports due to US import tariffs.

4. Stabilizing the Rupiah with Market Interventions

Bank Indonesia must actively intervene in the foreign exchange market and Domestic Non-Deliverable Forward (DNDF) to maintain the stability of the rupiah exchange rate and prevent further depreciation.

Ibrahim said that these steps must be taken immediately so that Indonesia not only survives but also manages to overcome the negative impacts of Trump's protectionist policies.

"If we do not act quickly, then the domino effect of this policy could be wider and more detrimental to the national economy," he said.

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