Ilona Estherina, Jakarta – Coordinating Minister for Economic Affairs Airlangga Hartarto warned that the risk of a global recession is rising following the imposition of U.S. import tariffs, which have created mounting uncertainty in the global economy.
Speaking at an economic gathering attended by President Prabowo Subianto and several ministry and institutional representatives at Mandiri Tower, Sudirman, Jakarta, on Tuesday, April 8, 2025, Airlangga pointed to the repercussions of the U.S. imposing reciprocal tariffs on 60 countries.
"The probability of a recession has increased," he said.
Airlangga added that global trade policies have become increasingly unpredictable. Volatility in currency markets and the weakening of emerging market currencies have further added to the economic strain.
"Financial market indicators are still fluctuating. The Composite Stock Price Index (CSPI) was negative this morning, but is now in a positive trend," he noted.
He also highlighted that China's retaliatory tariffs have intensified the strain on global trade, causing corporations to delay production and expansion.
"There is a decline in consumption, and even a 'wait and see' approach for investment or expansion," he said.
As reported, on April 2, 2025, former U.S. President Donald Trump announced a blanket 10 percent import tariff on products from all countries, effective April 5, 2025. Additionally, the U.S. introduced reciprocal tariffs targeting countries with which it runs a trade deficit.
These tariffs, which came into force on April 9, 2025, hit Indonesia with a 32 percent rate and China with 34 percent.
Although Singapore was only subjected to a 10 percent tariff, Singaporean Prime Minister Lawrence Wong said that the world had faced a similar situation in the 1930s, when escalating trade wars eventually led to armed conflict and, ultimately, the outbreak of the Second World War.
"No one can say how the current situation will unfold in the coming months or years," he said, quoted from Business Times.
"But we must be clear-eyed about the dangers that are building up in the world."
The Singaporean Prime Minister warned his citizens to be wary of this. He believed that America's actions risk making global institutions weaker and international norms eroding.
An increasing number of countries are expected to pursue narrow self-interests, resorting to force or coercion to achieve their goals.