AS & Tiongkok Sepakat, Apa Dampaknya untuk Indonesia?

Summary

This transcript highlights a strategic discussion on the impact of the recent trade agreement between the United States and China, focusing on its implications for Indonesia. Muhammad Dian Revindo, Deputy Head of the Economic and Society Research Institute at the University of Indonesia, explores the potential scenarios for Indonesia amidst the global trade tensions. He outlines strategies for mitigating risks, enhancing domestic economic resilience, and fostering better international relations. Revindo also emphasizes the need for Indonesia to prepare for both possible outcomes: engaging with the U.S. or moving forward without it, while strengthening internal reforms and external trade policies.

Takeaways

• 😀 The recent trade agreement between the United States and China marks a temporary reduction in trade tariffs, with significant implications for global and Indonesian trade dynamics.
• 😀 The agreement, reached after talks in Switzerland, will see the US reduce tariffs on Chinese imports from 145% to 30%, while China will lower tariffs on US imports from 125% to 10%.
• 😀 The global economic slowdown has been averted for now, but the situation remains uncertain, especially after the 90-day grace period.
• 😀 Indonesia should prepare for two possible scenarios: one where trade tariffs increase again after 90 days, and another where the US is no longer involved in global trade negotiations.
• 😀 Trump has already achieved significant tariff increases, and while the US may appear to ease tensions, they still benefit from higher tariffs than before the trade war.
• 😀 Indonesia should be strategic, monitoring competitors like Vietnam and enhancing relations with countries such as Japan, South Korea, and Singapore to diversify trade options.
• 😀 Efforts should be made to strengthen economic collaborations without the US, including the expansion of BRICS and cooperation with countries through frameworks like RCEP and WTO reform.
• 😀 Internally, Indonesia must focus on government spending efficiency, business facilitation, workforce productivity, and creating jobs through initiatives like labor-intensive industries.
• 😀 Trade defense mechanisms, such as anti-dumping and safeguard measures, are essential to protecting domestic industries, especially amid external trade pressures.
• 😀 A key strategy is to strengthen border control enforcement to prevent the entry of illegal and dumped products, which could undermine local industries.
• 😀 Indonesia's investment climate is impacted by global uncertainty, but by offering clear long-term policies, Indonesia could attract foreign investors and incentivize existing ones to expand operations.

Q & A

What recent agreement between the United States and China is discussed in the script, and how does it impact Indonesia?

The recent agreement between the United States and China involves both countries reducing tariffs on each other's imports. The US will lower tariffs from 145% to 30%, while China will lower tariffs from 125% to 10%. This agreement has implications for Indonesia as it could affect global trade dynamics, and Indonesia needs to prepare for both possible outcomes: a return to higher tariffs or a reduction in trade barriers.

What are the two scenarios Indonesia needs to prepare for regarding the US-China trade deal?

Indonesia should prepare for two scenarios: 1) A scenario where the US and China revert to escalating tariffs after the 90-day period, and 2) A scenario where the tariffs are permanently reduced, and the US no longer plays a central role in global trade. Both scenarios require Indonesia to strategize its approach accordingly.

How does the script describe Trump's approach to tariffs and its impact on global trade?

Trump's tariff approach is described as fulfilling his political promises, particularly to the American working class. Although tariffs are being reduced, they remain higher than pre-trade war levels, effectively securing what Trump wanted. This move could have significant consequences for global trade, as other countries respond with bilateral negotiations.

What role does Indonesia play in global trade according to the script, and how should it respond?

Indonesia is encouraged to adopt a dual approach in dealing with global trade. On one hand, it should maintain and strengthen its relationships with countries that are not directly seen as rivals to the US, such as Japan, Korea, and Singapore. On the other hand, Indonesia should continue fostering its economic ties without involving the US by joining global economic organizations like BRICS, the OECD, and RCEP.

What internal reforms does Indonesia need to undertake to strengthen its economy amidst global uncertainties?

Indonesia needs to focus on several key internal reforms: improving government spending effectiveness, enhancing ease of doing business, reviving labor-intensive industries, and strengthening the enforcement of trade policies. These reforms are necessary to ensure that Indonesia's domestic economy remains competitive in the face of external trade pressures.

What is the significance of border control and monitoring illegal products, as mentioned in the script?

Strengthening border controls is seen as a critical strategy for protecting Indonesia's industries from unfair competition, especially illegal and dumped goods. Monitoring and enforcing these regulations would help safeguard local industries and ensure that products entering the market are legitimate and comply with national standards.

How does Indonesia's current tariff rate compare to the United States' perceptions of trade imbalances?

Indonesia's tariff rate on American goods is relatively low, around 8%, which contradicts the perception that Indonesia imposes high tariffs (such as the alleged 64%). This discrepancy highlights the need for Indonesia to present accurate data during trade negotiations to correct misperceptions and avoid undue pressure from the US.

What is Indonesia’s strategy if it needs to negotiate with the US despite trade challenges?

If Indonesia is forced to negotiate with the US, it should not approach the negotiations with a sense of inferiority. Indonesia should focus on leveraging its advantages, such as its low tariff rates and participation in international agreements like the Generalized System of Preferences. Additionally, offering a limited Free Trade Agreement could help facilitate trade with the US.

What steps can Indonesia take to improve its investment climate according to the script?

To improve the investment climate, Indonesia should offer greater certainty and better infrastructure for both domestic and foreign investors. This includes encouraging existing investors to expand their operations in Indonesia, improving logistics, reducing bureaucracy, and potentially revising import restrictions on critical components needed for industrial growth.

What is the potential impact of the 90-day trade agreement on Indonesia’s business environment?

The 90-day trade agreement between the US and China is seen as a temporary relief from trade tensions. For Indonesia, the potential impact will depend on whether the global economic environment stabilizes or if tensions resurface after the 90-day period. In either case, Indonesia must focus on providing investment certainty and improving domestic competitiveness to attract and retain investments.