1.2 Million Indonesian Jobs at Risk Due to Trump’s Policies

Potential shifts in U.S. trade policies under a second Trump administration are raising concerns about their impact on the Indonesian economy, particularly regarding the risk to approximately 1.2 million Indonesian jobs. These jobs, primarily concentrated in sectors reliant on trade with the United States, could face significant challenges if President Trump’s proposed policies are implemented.  

One of the primary concerns revolves around potential increases in tariffs on Indonesian goods entering the U.S. Sectors such as textiles, footwear, and electronics, which are significant contributors to Indonesia’s export revenue and employment, are particularly vulnerable. A substantial increase in tariffs could make Indonesian products less competitive in the U.S. market, leading to reduced export volumes and subsequent job losses.  

Another factor contributing to the job risk is the potential for increased protectionist measures that could disrupt global supply chains. Indonesia, like many Southeast Asian nations, is deeply integrated into these supply chains, with many industries relying on the flow of goods and components between countries. Any disruption could lead to production slowdowns and job cuts.  

The possible imposition of stricter “America First” policies could also affect foreign direct investment (FDI) from the U.S. to Indonesia. Many Indonesian industries rely on U.S. investment for expansion and modernization, and any reduction in FDI could hinder growth and job creation.  

Furthermore, potential changes to the U.S. Generalized System of Preferences (GSP), which provides preferential tariff treatment for certain Indonesian goods, could also have a significant impact. The removal or modification of GSP benefits would increase the cost of Indonesian exports to the U.S., potentially leading to a decline in demand and job losses.  

The Indonesian government is closely monitoring these developments and exploring strategies to mitigate the potential impact. Diversification of export markets and strengthening domestic industries are being considered as crucial measures to reduce reliance on the U.S. market.  

While the exact extent of the impact remains uncertain, the potential risk to 1.2 million Indonesian jobs underscores the importance of maintaining stable and mutually beneficial trade relations between Indonesia and the United States.