President Donald Trump policies on imposing high import tariffs on China and other countries such as Canada and Mexico will give benefits for Indonesia, an expert said.
International Relation Lecturer at Padjajaran University, Teuku Rezasyah, said that if Chinese products are subjects to U.S. high tariffs, those products will be more expensive in the United States and they will be no longer competitive in the U.S. as what Trump has expected.
He added, however, that for China it is an opportunity for the country to strenghten its traditional markets, such as ASEAN countries.
For that reason, it is probably true that the price of Chinese products to ASEAN will be adjusted by CAFTA (China ASEAN Free Trade Agreement). That’s good,” Rezasyah spoke to Indonesia Business Post on Thursday, February 6, 2025.
He said further that this move will actually benefit Indonesia as Indonesia can secure tremendous investments from China, including in the form of economic cooperation, such as the Regional Comprehensive Economic Partnership with China.
“If China diverts its products to Indonesia, it is a momentum for Indonesia to secure a favorable policy. China will divert its trade focus to ASEAN, including Indonesia,“ he cited.
On February 1, 2025, President Donald Trump signed an executive order implementing a 10 percent additional tariff on imports from China, effective February 4, 2025.
These tariffs are part of a broader trade strategy that also includes a 25 percent tariff on imports from Canada and Mexico. The Trump administration cited concerns over illegal immigration and the flow of drugs, particularly fentanyl, as primary reasons for these measures.
The new tariffs have raised concerns among U.S. industries, especially in the pharmaceutical sector. Hospitals and drug manufacturers are worried about potential shortages and increased prices for medications, as many active pharmaceutical ingredients are sourced from China.
Additionally, the removal of tax exemptions for small packages from China has impacted e-commerce platforms like Shein and Temu, leading to higher costs for consumers and potential disruptions in supply chains.
These developments have significant implications for global trade and various industries, with potential effects on consumer prices and international supply chains.
