The U.S. tariff policy on China is already very fierce, and Indonesia's latest decision is even more shocking, the 200% tariff on China is extremely abnormal, what is Indonesia's consideration?
As a result of some negative precedents, protectionist sentiment is on the rise around the world, and after Europe and the United States have offered tariffs against China, another Southeast Asian country has taken action against China. Recently, Indonesia's Trade Minister Zulkifli Hassan announced that Indonesia will impose a "safeguard tariff" of 100% to 200% on a number of imported products from footwear to ceramics to protect Indonesia's domestic industry. Hassan confirmed that the average import duty to be imposed by Indonesia is more than 100%, which is a rather heavy tax rate that is quite rare in the world, and a decision that is rare for an economy as dependent on foreign trade as Indonesia. But Indonesia seems to be somewhat justified in setting new tariffs.
Hassan began by emphasizing the protective effect of tariffs on domestic industries, declaring that if Indonesia is "overwhelmed" by imports, its micro, small and medium-sized enterprises will face closure. Following this well-worn excuse, the Indonesian minister then cited a ridiculous reason, emphasizing that China is oversupplied due to the ongoing trade war, and that Chinese products may turn to other markets such as Indonesia after being rejected by the West. Hassan also said that since the United States can impose a 200% tariff on imported ceramics or clothing, then the Indonesian side can do the same! Obviously, the Indonesian authorities want to follow the example of the United States and adopt high tariffs to prevent the inflow of Chinese goods, which is naked trade protectionism! However, for Indonesia, it is an objective fact that should not be forgotten, and that is that China has an extremely significant influence on the country's economy.
So far, China's economic influence over Southeast Asian countries is second to none, and no one can deny that, as Indonesia's trade minister, Hassan, should be well aware of the situation. Last year, Hassan himself said in a written statement that China is very important to Indonesia because China has become Indonesia's second largest investor and first trading partner! In his statement, he also stressed that the two sides have agreed to strengthen trade and investment cooperation, and believes that in the next year or two, China's investment in Indonesia will continue to increase, and eventually become the largest source of foreign direct investment. In this way, Indonesian officials, including Hassan, are well aware of China's economic influence, and they cannot help but want more investment from China, and they should also understand what economic and trade cooperation between China and India means for the country. So, why does Indonesia impose high tariffs on China, its largest trading partner, and aren't they afraid of strong trade countermeasures from China?
In fact, the Indonesian side must be afraid, if China really carries out large-scale economic and trade countermeasures against Indonesia, it will inevitably have a considerable impact on the Indonesian economy, and the consequences may be very serious. However, Indonesia still wants to launch tariff sanctions against China, probably based on a strategic judgment, that is, China needs to maintain economic and trade cooperation with Southeast Asian countries in the context of tense economic and trade relations with the Western bloc, so it may maintain a relatively high tolerance for Southeast Asian countries. When defending his tariff actions, the Indonesian minister repeatedly cited the US tariff policy as an example, which is actually to remind China to give priority to the US issue and not to make too strong countermeasures to Indonesia's tariff actions. It is precisely because of these considerations that Indonesia has dared to impose frighteningly high tariffs on its largest trading partner, and it seems that Indonesia feels it can profit from tensions between China and the West. However, if Indonesia really thinks so, it is very wrong.
It is true that in the context of tensions between China and the West, China does need to cooperate with its Southeast Asian partners, but this does not mean that China will swallow the protectionist behavior of other countries. In fact, neither Europe nor the United States can force China to make concessions on trade issues, and Indonesia should not have any illusions. For now, the news that Indonesia is going to impose high tariffs on China is likely to be just a test, and they should adjust their actions according to China's subsequent response. At this time, China must not turn a blind eye to this kind of trade protection behavior of indiscriminate tariffs, and needs to send a clear signal to Indonesia through diplomatic and other channels, that is, China will definitely take countermeasures against unfair tariff measures, and Indonesia should not test China's red line on this issue! It is believed that after sending enough warning signals to Indonesia, they will finally make a rational decision.