Indonesia is worried about being targeted by Donald Trump in a wider protectionist push, as trade tensions between the U.S. and China continue to escalate, a senior minister said.
The Southeast Asian nation’s large trade surplus with the U.S. may invite further scrutiny by the Trump administration even as the spat between the world’s two biggest economies offers potential gains to Indonesia, Planning Minister Bambang Brodjonegoro said. A prolonged dispute may also weigh on Indonesia’s current account deficit, foreign inflows and currency, he said in an interview in Jakarta on Tuesday.
World markets were rattled this week as China and the U.S. announced tit-for-tat tariffs on hundreds of goods, adding to concerns about potential spillover effects for countries across Asia. Indonesia, which last year ran a trade surplus of $10.7 billion with the U.S., was previously included in a probe ordered by Trump into countries suspected of abusing the trade relationship. The country’s access to a U.S. preferential trade program is currently under review.
“Indonesia and China have similarities, only at a different scale. Both of us create a deficit for the U.S. side,” Brodjonegoro said. “Now the question is, how can we approach the U.S. so that Indonesia will not be part of their idea of trade protectionism and how can we take advantage of potential declining Chinese exports to the U.S.”
Indonesian officials are "intensively” lobbying the Trump administration to remain part of the Generalized System of Preferences, Brodjonegoro said. The program is designed to promote economic development by allowing duty-free entry for thousands of products from designated beneficiary countries. Earlier this year, the U.S. indicated it would remove India from the program.
“We are still discussing, lobbying, making sure that we will be safe from this kind of treatment," Brodjonegoro said. “I cannot say it’s positive but we haven’t heard negative things, so far. But you never know,” he said, citing the case of India.