The President of the United States, Donald Trump, recently shocked the world with his move to delay the implementation of higher reciprocal tariffs for 56 countries. The announcement came on Wednesday (9/4) local time, where Trump confirmed that this delay lasted for 90 days. However, tariffs for China are still running with an increase from 104% to 125% in response to the Bamboo Curtain Country’s retaliatory actions.
Encouraging Market Reaction
This step to postpone tariffs is clearly inseparable from the panic in the financial market that is getting stronger, as well as strong pressure from business people and investors for this policy to be canceled. Earlier, on Tuesday (8/4), Trump hinted that the US was open to making a deal that could reduce or eliminate the tariffs. He even added that countries that do not retaliate will be rewarded.
The Impact of the Trade War That Is Heating Up
But Trump’s decision to continue tariffs on China comes amid an ongoing escalation of the trade war. China on the same day announced it would raise tariffs on goods from the US from 34% to 84% effective April 10, 2025. This is a significant step after the US imposed retaliatory tariffs, which will certainly trigger further tensions in the trade relations between the two countries.
Positive Response in the Stock Market
After the announcement of the tariff delay, the stock market in the US immediately rebounded significantly. The S&P 500 jumped 9.52% and the Nasdaq recorded gains of up to 12.16%. This positive sentiment also spilled over into Asian markets on Thursday (10/4), with the Nikkei up 8.99%, SSE 1.16%, and HSI 2.06%. This suggests that market optimism has started to return, at least for now.
Implications for the Indonesian Economy
On the domestic side, Finance Minister Sri Mulyani said that the 32% tariff imposed by the US on Indonesia could cut national economic growth by around 0.3% to 0.5% percentage points. However, he appreciated the tariff delay as an opportunity to negotiate to reduce economic risks and form mutually beneficial cooperation.
Potential Uncertainty in the Future
Although the 90-day delay provides room for diplomacy, we believe that the outcome of these negotiations—both on the US and Chinese sides—will be very dynamic. These prolonged negotiations could serve as a model for other countries in dealing with increasingly complex trade policies.
Investment Strategy in the Midst of Uncertainty
For investors, it is important to remain vigilant and pay attention to developments that can have an impact. Diversifying portfolios across different asset classes can help reduce the impact of market volatility that may arise. Consider investing in PBS003 or ST014–T2, which have lower risk.
Keeping the focus on good and bad news regarding global trade issues can be key to responding wisely to market movements. Stay informed and wise in your investment decision-making!