JAKARTA - President of the United States (US) Donald Trump will implement a Resipprocal Tariff policy starting April 2, 2025 and the sectors affected include automotive, agricultural, metal, and manufacturing.
Meanwhile, this policy aims to equalize US import rates to import duties imposed by trading partner countries, to protect domestic industries and reduce trade deficits.
In addition, the main policy implemented is the imposition of new tariffs of 25 percent on aluminum, copper, wood, and steel imports, which aim to strengthen US domestic production. However, this has the potential to lead to an increase in raw material costs for the construction, automotive, and electronic industries.
Meanwhile, market reactions to this policy can be seen with the decline in Dow Jones by 650 points and the weakening of Nasdaq by 2.6 percent, reflecting investor uncertainty. On the other hand, the US mining and forestry sector has the potential to receive a positive impact with increased investment.
Bank Danamon Indonesia economist Hosienna Evalita Situmorang said that Indonesia, as the main exporter of copper and wood to the US, needs to anticipate the impact of these policy changes.
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According to him, in the short term, export disruption is expected to affect the mining and forestry industry, while exchange rate volatility will increase due to global trade uncertainty.
"In the medium term, the diversification of the export market is the main strategy to reduce dependence on the US and industrial downstreaming is increasingly encouraged to increase added value before export," he said in his statement, Wednesday, March 5.
In the long term, Hosienna said that foreign investment opportunities in the raw material processing sector are increasingly open, and Indonesia has the potential to strengthen its role in the global supply chain through trade agreements with new partners.
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