Indonesian Trade Minister Zulkifli Hassan said that import tariffs of up to 200% on Chinese goods will be imposed to mitigate the impact of the "Sino-US trade war" on Indonesia.
Is it for Indonesia, or will it become a thug of the United States?
The outrageous statements made by senior Indonesian officials in public are ostensibly to avoid the guise of so-called "trade conflicts" and to protect Indonesia's domestic micro, small and medium-sized enterprises and production.
It seems to be conclusive and brilliant, but in fact, it can't stand scrutiny at all.
In January 2023, Indonesia became a member of the Regional Comprehensive Economic Partnership (RCEP), an economic organization known as the world's most populous, largest economic and trade scale, and the most promising free trade area.
The Regional Comprehensive Economic Partnership (RCEP) is an eight-year agreement initiated by ASEAN in 2012 and developed by 15 members, including China, Japan, South Korea, Australia, New Zealand and the 10 ASEAN countries.
In the face of Indonesia, in accordance with the agreement, we will fulfill the agreed tax rate and expand to the advanced field of information technology products, showing our greatest sincerity and attitude.
From January 1, the provisional import tax rate lower than the most-favored-nation rate will be implemented for 1,020 goods; From January 2, the Regional Comprehensive Economic Partnership (RCEP) agreement tax rate will be implemented for some goods originating in Indonesia; From July 1, the eighth step of the MFN tariff rate for 62 information technology products will be implemented......
To be sure, Indonesia's import and export data for the last four years shows that Indonesia is benefiting from the agreement.
In particular, our preferential treatment in information technology, with the in-depth economic exchanges, will inevitably make Indonesia in the traditional economy, to achieve the possibility of industrial upgrading and a bright future.
If we give up the possibility of future information technology upgrading and realize the prospect of economic transformation just for the sake of a deficit of just a few months, this is undoubtedly losing watermelons and picking up sesame seeds, and the gains outweigh the losses.
However, Indonesia's deficit seems to have something else to hide.
According to relevant reports, the medical products, consumer goods, agriculture, industry and other fields involved almost include all the needs of Indonesia in medical care, consumption, and industrial upgrading, especially Indonesia is located in the tropics, and the strength of industry and agriculture is bound to promote Indonesia's upgrading in agriculture and industry, better use of local resources and conditions, get rid of the traditional economic pattern, and the unfavorable situation in international trade.
In addition to medical products and consumer goods, the adjustment also highlights two aspects: first, the implementation of zero tariffs on potash fertilizers, unwrought cobalt, etc., and the reduction of import tariffs on some wood and paper products, boric acid and other goods; The second is to reduce import tariffs on lithium niobate, e-ink screens, iridium oxide for fuel cells, and roller bearings for wind turbines. Experts said that reducing import tariffs on these commodities will not only help strengthen the supply capacity of resources, but also promote the innovation and development of advanced manufacturing industry and accelerate industrial transformation and upgrading.
From the perspective of Indonesia's population and working population, Indonesia's population data are showing rapid and blowout growth, which is in urgent need of cheaper goods and high-quality goods to enter the domestic market, on the one hand, it can improve the quality of life and life of the domestic population, on the other hand, the huge working population base will also be released with the continuous release of the demographic dividend, from population-intensive, to technology-intensive and other higher-dimensional economic form transformation.
It can be said that Indonesia is in the upward cycle of economic development, with broad development potential and a huge domestic market, which all require more reasonable development costs, reduce economic obstacles, and achieve a good opportunity for economic take-off.
The hidden nature of Indonesia's deficit
The current situation of Indonesia's economy is mainly due to the fact that the monetary policy is consistent with that of the United States, which is the root cause and core of Indonesia's deficit and GDP downward trend, rather than the rhetoric of Indonesia's senior officials to protect the so-called small and medium-sized enterprises.
From the beginning of the U.S. interest rate hike cycle in 2022, Indonesia has kept pace with the U.S., raising interest rates rapidly, maintaining a high interest rate situation for a long time, and even raising interest rates to 6%.
These are enough to show that Indonesia is deeply affected by the external economic environment, especially the US monetary policy, which in turn reflects the endogenous fragility of the Indonesian economy, unable to resist the external economic rhythm, in the monetary policy, economic policy passively coping, in order to prevent the risk of the Asian financial crisis in 1998, made a helpless choice.
In the exchange rate and the domestic economic market, out of the panic in the depths of memory, the decision to sacrifice the domestic economic market had to be made.
Indonesian exchange rate and Indonesian interest rate
Indonesian GDP
With the interest rate hike cycle and the rapid pace of interest rate hikes, Indonesia has been forced to interrupt the trend since the recovery of the epidemic, not only failed to get out of the epidemic cycle, but remained consistent with the United States and forced to enter the interest rate hike cycle, and finally there was a worse economic situation and trend than since the epidemic, showing a cliff-like change, and even further deterioration.
Step-by-step traps
According to Indonesia, if a 200% tariff is imposed on us, it will inevitably cast a huge shadow on Indonesia's domestic demand and economic development, and pay a heavy price.
The United States does not choose us, but chooses the re-industrial plan, but the problem is that American goods are not cheap, even for the American market, in addition to using technology and product advantages to crush the Indonesian market, and even more, will use the high-interest rate strategy of the US monetary policy to crush Indonesia's foreign exchange.
Indonesia's fragile economic environment and industrial structure simply cannot withstand the repeated tossing and turning of American products and U.S. monetary policy.
On the other hand, behind our sincerity, the mainland insists on cutting interest rates and reserve requirements, and uses its own profits to subsidize RCEP member countries, in order to work with member countries to resist the hegemony of the United States in international trade and financial order, and wantonly harvest the unreasonable behavior of other countries.
If you want to go all the way to the dark, then don't blame the American dad for harvesting handy, it is logical.
Without the good cooperative relationship between China and the efforts to build an economic circle with ASEAN, in the end, it was in vain, and instead it sought the skin of jackals, tigers, leopards and tigers, and when the nightmare of 1998 struck again, there was really no one to save it.
But then again, your arrogant appearance, like Ah Q in Mr. Lu Xun's "The True Story of Ah Q", what monk can touch, why do you use the words of the tiger and wolf that I can't touch?
You have to be clear, you are not a US imperialist.
It's time to wake up, Indonesia, don't dream, there is nothing in the dream except the wolf of the American imperialists.