The Rupiah Is Predicted To Weaken To Rp16,250 Per US Dollar After Trump's Release Of Import Tariffs

US and Rupiah dollars (Photo: Antara)

JAKARTA - The rupiah exchange rate in trading Wednesday, July 9 is expected to move lower against the United States (US) dollar.

To note, citing Bloomberg, on Tuesday, July 8, the rupiah spot exchange rate closed down 0.34 percent to the level of Rp. 16,240 per US dollar. Meanwhile, the Jakarta Interbank Spot Dollar Rate (Jisdor) exchange rate of Bank Indonesia (BI) closed lower by 0.20 percent to a price level of Rp. 16,237 per US dollar.

Currency observer Ibrahim Assuaibi expressed concern about the possible resumption of the trade war rising, following US President Donald Trump's announcement on his social media platform about trade letters sent to South Korea and Japan, setting duties on goods and products.

In addition, Ibrahim said that the potential for a trade war continues after Trump announced a 25 percent tariff for all Korean and Japanese products sent to the US, starting August 1.

"In a letter addressed to leaders of Japan and South Korea, Trump announced that a 25 percent tariff will be imposed on all goods originating from their country, effective from August 1," he said in a statement, quoted Wednesday, July 9.

Ibrahim added that risk sentiment deteriorated as markets prepare for a deadline on July 9, when the United States (US) was officially expected to notify trading partners about new rates potentially as high as 70 percent, targeting more than 100 countries.

Trump also released a series of letters on Monday outlining higher trade rates in several Asian and African countries, including a 25 percent tariff on South Korea, Japan, Malaysia and Kazakhstan, a 30 percent import duty on South Africa, a 32 percent import duty on Indonesia, a 35 percent levy on Bangladesh, and a 36 percent levy on Thailand.

In addition, strong US economic data sparked betting that the Federal Reserve will not cut interest rates in the coming months. Trump's tariff threat has also spurred several requests for a greenback, amid concerns that the levy will be inflationary to the US economy.

Meanwhile, from within the country, Ibrahim said that Donald Trump announced that Indonesia would still be subject to a reciprocal rate of 32 percent and the application of this new tariff will take effect from August 1, 2025.

According to him, with the postponement of the implementation of the new tariff, it will give each Indonesia about three additional weeks to make a deal with the White House. Trump's decision is seen by many as causing market uncertainty.

This tariff is not just a matter of the economy, but also a geopolitical and negotiation strategy. In the context of game theory, this tariff is a US effort to change the "payoff matrix" in bilateral trade relations, forcing Indonesia to re-evaluate its export strategies and trade diplomacy.

Therefore, the government estimates that national economic growth will be cut by 0.3 to 0.5 percent due to this policy. In addition, the risk of layoffs in the labor-intensive sector such as textiles and footwear is getting bigger.

Even though it was cut, Indonesia's position was still strong, although the projected economic growth in 2025 fell from 5.2 percent to 4.7-5 percent. Because Indonesia's economic growth projection is still higher than global economic growth which is only 2.3 percent.

Ibrahim estimates that the rupiah will fluctuate but closed lower in trading on Wednesday, July 9, 2025 in the price range of Rp. 16,200 - Rp. 16,250 per US dollar.