House Calls Gov't to Formulate Plan Facing US-China Trade War

TEMPO.CO, Jakarta - House of Representatives (DPR) Speaker Bambang Soesatyo asked the government to prepare a strong countermeasure anticipating the trading sentiment between the United States and China, which he says will disrupt the stability of several countries including Indonesia.

“The government with the DPR needs to compose new initiatives to get around the global uncertainty that could potentially damage the world’s trade system and mechanism,” said Bambang in a written letter on June 9.

The relations between the US and China frenzied after a new import tax was introduced by US President Donald Trump that effectively imposes a 25 percent import tax for products originating from China, which is said to be equivalent to USD 200 billion.

That move was responded by China canceling its order on US soy product and is said to also cancel previous orders.

Moreover, Bambang argues that the trade war between the two superpowers would eventually affect Indonesia’s economy that could see weakening exports and could cause a prolonged trade balance deficit.

“The exports of Indonesia’s top commodities such as crude palm oil and rubber export will not be as smooth as previous periods,” said the House Speaker.

Meanwhile, Indonesia’s market is prone to be infiltrated by imported products from China such as steel. Demand for foreign exchange could spike following rising import volumes. High demands for foreign exchange could potentially weaken Rupiah.

As such circumstances arise, the government needs to make sure that the effects of the trade war will not seriously affect Indonesia and cause serious damages to its domestic economy.

Despite his fears, Bambang remained positive and optimistic that Indonesia will be able to face the global trade sentiment and believes Indonesia is still a potential market for foreign investors as infrastructure developments are starting to be felt nationwide.

FRANCISCA CHRISTY ROSANA