Jakarta – Global condemnation has descended on the United States for its accelerating shift toward protectionist policies on trade and investment, with a sweeping 10-percent "baseline" tariff slapped on all US imports except for select exceptions based on strategic considerations.
Attributing that policy shift to US President Donald Trump alone is misleading, because other administrations have fostered it too, such as that of Joe Biden with the Inflation Reduction Act and the CHIPS Act, both passed in 2022.
The Biden administration also maintained protectionist measures introduced by Trump against China, and doubled down on them by scrutinizing efforts to circumvent them through third countries like Vietnam or Mexico.
Both administrations also applied pressure on other countries to refrain from using Chinese technology or accepting Chinese investment, and both have sidelined the World Trade Organization by obstructing its ability to settle disputes through the Appellate Body.
Given the bipartisan protectionist shift in the US's trade and investment policies, we should not fool ourselves into believing that the situation will change fundamentally once a new administration takes over again in Washington.
America First is deeply ingrained in the country's political DNA since the first US president, George Washington, declared: "It is our true policy to steer clear of permanent alliances with any portion of the foreign world."
The world is witnessing a seismic shift in trade and investment, with protectionism spelling the end of open markets that are vital for emerging economies like Indonesia.
We, too, bear some of the blame, because all governments, including ours, care about fair trade only where it serves national or certain vested interests, and they object to it where it runs counter to those interests.
If we are being painfully honest, the US economic policy impulse is no different from ours.
Washington demands that global firms make their products in the US if they want to sell in that market, just as we extracted investment commitments from Apple before allowing their latest iPhones to be sold here.
The foundation of global prosperity is being eroded as governments around the world work together unwittingly in killing the ideal of free trade, replacing it with import and export controls, unilateral sanctions and investment restrictions or mandates as they see fit.
The consequences of this are particularly dire for developing countries, especially smaller ones that depend more heavily on cross-border supplies for economic activity and that lack a large market to use as a bargaining chip for factory investment.
With no multilateral institutions capable of enforcing the principles of global trade since the WTO has been undermined, there is little hope for a general change of course, though specific policies will be tweaked where governments find protectionism working against their interests.
The best Jakarta can do for now is to engage with Washington in a quest to achieve those famous "deals" Trump keeps talking about and to prevent or reduce the 32-percent "reciprocal tariff" to be imposed on us.
We have more leverage for this than many other countries, including our massive share of global nickel supply, a critical mineral the US exempted from tariffs, and potentially lucrative exploration and production contracts for US oil and gas companies.
We also have our large domestic market, strategically embedded within the wider Regional Comprehensive Economic Partnership area.
To facilitate such a dialogue, President Prabowo Subianto must swiftly appoint a new ambassador to the US, a post that has been left vacant for almost two years with no good reason.
Beyond a bilateral dialogue, however, Jakarta should coordinate its approach with other ASEAN+3 or BRICS countries. Only together can we increase our clout to better defend our overlapping interest in open markets and prevent being played off against one another.
In the long run though, and this should guide our stance at the United Nations, we must not abandon the ideal of free global trade in exchange for a policy of dealmaking between countries, because in doing so, we would be doing ourselves, and the world, a disservice.
Source: https://www.thejakartapost.com/opinion/2025/04/07/killing-trade-together.htm