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Finance Minister Responds to Trump's Tariff War

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16 Apr 2025, 10.26 WIB

April 2, 2025, might just mark the beginning of a new era in global trade tensions. On this day, the United States (US) President Donald Trump announced sweeping new import tariffs, aiming to boost the US economy and reduce reliance on other countries. This move caught the world by surprise, including Indonesia.


Under this policy, the U.S. government is not only applying a universal 10% tariff on all imported goods but also introducing additional tariffs targeting specific countries. These extra tariffs are determined based on each country’s trade balance with the US, which means nations with large trade surpluses will face steeper import duties. According to the White House, the goal of this move is to address international trade flow imbalances (Tempo, 2025).


The Minister of Finance of the Republic of Indonesia, Sri Mulyani Indrawati, described the US tariffs as a transactional move to cover their financial deficit, suggesting that economic rationale was lacking. She shared these views during an Economic Symposium with the President of the Republic of Indonesia on Tuesday, April 8, 2025 (CNBC, 2025).


Sri also noted that the introduction of reciprocal tariffs has significantly altered the global economic landscape. What was once a rule-based system of import tariffs has, in just a month, shifted into an environment marked by growing uncertainty. Sri added that this wave of tariff hikes carries extraordinary risks and could fundamentally reshape the global alliance structure (CNBC, 2025). The countries affected by the new tariffs include the following:

 

(TEMPO, 2025)


In a dramatic development, Trump imposed a 145% tariff on China but deferred tariffs on 56 other countries, including Indonesia (BBC, 2025).
In response, Sri revealed several strategies are prepared, including reducing Article 22 income tax and import duties on Indonesian products from the US. The current 2.5% import income tax for registered importers could be slashed to 0.5%. Similarly, import duties—currently ranging from 5% to 10%—would be cut to between 0% and 5% (CNBC, 2025).


However, the Head of the Fiscal Policy Agency emphasized that the proposed tariff reductions are still under negotiation and won’t be enacted immediately.


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