JAKARTA The reduction in the reciprocal rate imposed by the President of the United States (US) Donald Trump to Indonesia is nothing more than a pseudo discount. The reason is, although in terms of down points, Indonesia is overshadowed by significant losses in the future, including the threat of a wave of layoffs (PHK).
Head of the Presidential Communication Office Hasan Nasbi said the reduction in the reciprocal rate from 32 percent to 19 percent was a progress and success that could not be considered small. He said that the resipprocal rate, which eventually fell by 13 percent, was obtained through the extraordinary struggle of the negotiating team led by the Coordinating Minister for Economic Affairs Airlangga Hartarto.
"This is also an extraordinary negotiation carried out by our president directly with President Donald Trump, and this is a common ground between our government and the US government," Hasan said at a press conference in Jakarta, Wednesday (16/7/2025).
An enthusiastic tone was also conveyed by the Minister of Trade (Mendag) Budi Santoso, who claimed that Indonesia was the ASEAN country that benefited the most in the new tariff scheme to the US.
According to Budi, at a rate of 19 percent, this figure is lower than other neighboring countries, except Singapore.
But claims that Indonesia will benefit from this tariff were denied by a number of observers. The Director of Economics at the Center of Economic and Law Studies (CELIOS) Nailul Huda revealed that the reduction in tariffs was arguably just a pseudo discount, because in reality Indonesia suffered significant losses from the results of the latest trade negotiations with Uncle Sam's country. On the other hand, economist Esther Sri Astuti warned the government about the threat of layoffs that remain looming.
One of the most striking losses, according to Huda, is the trade gap. Because, in this agreement, the US government can export goods to Indonesia at a rate of zero percent, while on the contrary, Indonesia's exports to the US are still subject to a tariff of 19 percent.
"In the end, Indonesia surrendered to the US government regarding the import rate set by Trump. Indonesia gets a pseudo discount from Trump," Huda told VOI.
"Imagine, the US, which in fact has received tariff relief to enter the market of developing countries such as Indonesia. I value this as the biggest loss of trade diplomacy that must be paid by the government or our business actors to the US," continued Huda.
This trade deal with Trump also has an impact on the domestic technology and digital industry, especially for companies that have not been able to compete globally.
These two industries, said Huda, will be under pressure by the non-trivial agreement of US products. In the global market, technology and digital products from the local community have not been able to compete, while domestically imported products are depressed.
"If so, the concept of digitalization in Indonesia is only interpreted as using technological goods, without becoming a producer of high-tech goods," he explained.
In addition, the increasingly heavy flow of imports will affect Indonesia's smaller trade surplus rate. Huda said that the trade surplus with the United States is one of the largest trade surpluses for Indonesia. For the record, in addition to not imposing taxes, the government also promised to buy products from the US energy, agriculture, and aviation industries on a large scale.
"Our exports to the US are slowing down, but our imports from the US will be even heavier. One of the pressures of its derivatives is that foreign exchange reserves can decrease and will affect the lower rupiah exchange rate," said Huda again.
The International Monetary Fund (IMF) predicts that the unemployment rate in Indonesia will increase compared to before. In 2024 the figure is 4.9 percent and will increase to 5.1 percent in 2026.
Executive Director of the Institute for Development of Economics and Finance (INDEF) Esther Sri Astuti predicts that the tariff increase set by the US will be followed by an increase in commodity prices at the buyer level.
"The impact will reduce demand for these products. If that happens, the company will be afraid of a recession, and what we don't expect is a laborlayoff," Esther said, adding that the domino effect of the national economy will be sluggish.
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Esther said, the potential for new unemployment will add to the new burden amidst the limited employment opportunities.
"For example, in some media. 50 vacancies were opened, but hundreds of people came, a thousand people. What does that mean? This means that there is a lack of job opportunities," he concluded.
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