Donald Trump will be inaugurated as the President of the United States on Jan. 20.
However, even before officially taking office, Trump had already made statements that have disrupted the global order.
He mentioned his intention to annex Greenland, a Danish territory, to the United States and stated that Washington would impose higher tariffs on Denmark if it prevented Greenland from joining the United States.
In addition, in November, Donald Trump, who won the U.S. presidential election, expressed his desire to make Canada the 51st state of the United States.
Moreover, Donald Trump’s tariff war policy is seen as having the potential to pressure production activities in major producing countries such as China, Mexico, and Canada.
This condition could hinder Indonesia from reaping the benefits of membership in BRICS, a group of countries originally consisting of Brazil, Russia, India, China, and South Africa.
UGM’s international relations policy expert, Professor Nur Rachmat Yuliantoro, stated that the tariff war policy could disrupt global economic stability by increasing trade uncertainty. As investors tend to avoid risks, the investment climate could also be affected.
Consequently, this situation could slow economic growth in many countries, including Indonesia. Indonesia’s full membership in BRICS has the potential to enhance its bargaining power in dealing with the protectionist policies of the United States under Trump’s second administration.
Therefore, the Indonesian government could strengthen trade and investment cooperation with other BRICS members to further develop its market.
“Joining BRICS is expected to strengthen Indonesia’s position and competitiveness on the global stage,” said Professor Yuliantoro in a statement to reporters on Tuesday (Jan. 14).
In addition, the Chair of the Department of International Relations at Universitas Gadjah Mada also pointed out that Trump’s planned policies could weaken the value of the Indonesian rupiah against the U.S. dollar, as the tariff war could disrupt investment flows and trade.
“There is a need to strengthen the economy’s fundamentals, including maintaining inflation rates and increasing the country’s foreign exchange reserves,” he explained.
Furthermore, the U.S. trade war with China, Mexico, and Canada will certainly provide opportunities, but it will also present challenges for Indonesia’s economy.
For example, Indonesia could offer alternative products if high tariffs are imposed on Chinese products. However, if Donald Trump’s policies slow down the global economy, the demand for those alternative products could also decrease.
“Innovation is the key to making Indonesian products of higher quality, thus increasing global competitiveness,” he concluded.
Author: Kezia Dwina Nathania
Editor: Gusti Grehenson
Post-editor: Afifudin Baliya
Photo: Freepik