Trump Stuns Global Market with 'Liberation Tariffs', Indonesia Among Targets

On Wednesday, April 2, 2025, U.S. President Donald Trump unveiled a sweeping import tariff policy dubbed the Trump Tariffs or Reciprocal Tariffs, in what he labeled a Liberation Day move to boost America’s economy and reduce reliance on foreign nations.

“It is the policy of the United States to rebalance global trade by imposing additional import duties on goods from all trade partners, unless specifically exempted,” Trump stated through an Executive Order released via the White House website.

What Are Trump’s Reciprocal Tariffs?

The new tariff scheme adopts a reciprocal model, whereby the U.S. imposes duties mirroring or matching those other countries place on American exports. All imports from U.S. trade partners now face a standard 10% tariff. However, countries with significant trade surpluses with the U.S.—such as Indonesia—are subject to additional tariffs, reaching up to 32%.

According to the White House, this approach aims to correct trade imbalances by setting tariffs at roughly half the rate that other nations apply to U.S. goods.

Criticism Over Economic Validity

Fadhil Hasan, an economist at the Institute for Development of Economics and Finance (Indef), criticized the tariff formula, calling it economically unfounded. In an online discussion on Friday, April 4, 2025, he noted that the U.S. estimates used to justify the tariffs are misleading.

“The numbers lack a clear economic basis,” Fadhil said, suggesting the U.S. assumed Indonesia imposes a 64% tariff on American goods—far above the actual rate, which he estimates to be around 8–9%.

He explained that the 64% figure likely stems from trade surplus data. Indonesia posted a trade surplus of US$ 16.8 billion against U.S. imports of US$ 28.3 billion, which, when divided, yields roughly 64%. This percentage may have been misinterpreted by U.S. officials as a tariff rate, leading them to set retaliatory duties at 32%—half that figure.