Observing The Threats Facing Indonesia's Economy Following Trump's Confirmation As President Of The United States

REUTERS/David Dee Delgado

Observing The Threats Facing Indonesia's Economy Following Trump's Confirmation As President Of The United States

Thursday, 23 Jan 2025

Donald Trump has once again assumed the presidency of the United States, having been inaugurated on Monday, January 20, in the afternoon local time.

He has returned to the White House, his former residence during his tenure as the 45th president from 2017 to 2021. This familiar figure in American politics has implemented economic policies that have had significant impacts on various countries, including Indonesia.

Yusuf Rendy Manilet, an economist from Core Indonesia, recalls the numerous implications of the 'America First' policy during Trump's first term. He emphasizes that the economic protectionism exercised by the United States under his leadership had considerable effects on Indonesia.

He believes that the fate of the nation this time will not differ significantly from the first term of Trump's administration. He anticipates that Trump's stringent policies may adversely affect Indonesia's exports to the United States. "This is particularly true due to the imposition of high tariffs and other trade barriers on products such as textiles, footwear, and agricultural goods," Yusuf stated to CNNIndonesia.com.

If this prediction holds true, there are three strategies that Indonesia could employ to navigate Trump's policies. Yusuf urges the Indonesian government and business stakeholders to take immediate strategic actions.

The first option is to enhance the competitiveness of domestic industries. This can be achieved by improving production efficiency and increasing the added value of products.

Secondly, Yusuf asserts that Indonesia must inevitably expand its export markets to reduce dependence on the United States. President Prabowo Subianto and his team could leverage regional economic cooperation, such as the Regional Comprehensive Economic Partnership (RCEP), and strengthen bilateral relations with non-traditional countries.

"Thirdly, we need to capitalize on the momentum of industrial relocation by improving the investment climate, infrastructure, and ease of doing business in Indonesia," he emphasized.