Indonesia financial regulator chief: Market reaction to Trump's tariff announcement relatively limited compared to previous announcement

Indonesia financial regulator chief: Market reaction to Trump's tariff announcement relatively limited compared to previous announcement

Indonesia's financial regulator, Bank Indonesia, has reported that the market reaction to U.S. President Donald Trump's latest tariff announcement has been relatively muted compared to previous announcements. This observation comes as Trump has threatened to impose new tariffs on a range of countries, including Indonesia, as part of his ongoing trade war strategy.

According to the latest data from Bank Indonesia, the Indonesian Rupiah has shown minimal volatility in response to the tariff threats. This is in stark contrast to the significant market reactions seen in previous instances when Trump announced tariffs on various countries, including China, Japan, and South Korea. The regulator attributes this limited reaction to the fact that Indonesia's economy is relatively insulated from direct impacts of U.S. tariffs on its primary export sectors.

Trump's tariff announcements have been a recurring theme throughout his presidency, with the latest round targeting countries such as Japan, South Korea, South Africa, and Indonesia. The U.S. president has stated that tariffs are a powerful tool to protect American jobs and industries, a stance that has been met with mixed reactions globally. The Indonesian government has been actively engaged in trade negotiations with the U.S., aiming to mitigate the potential negative effects of the tariffs on its economy.

Bank Indonesia's chief has emphasized that while the immediate market reaction has been limited, the long-term impact of the tariffs remains uncertain. The regulator is closely monitoring the situation and stands ready to implement necessary measures to stabilize the financial market if the tariff threats materialize into actual tariffs.

The U.S. has been imposing tariffs on a variety of countries, with the latest round of threats including Indonesia. The Indonesian government has been negotiating with the U.S. to avoid the potential negative impacts of these tariffs. The regulator's assessment of a relatively limited market reaction suggests that the Indonesian economy is currently less affected by the tariff announcements compared to previous instances.

References:
[1] https://www.cbc.ca/news/business/trump-tariff-letters-1.7579036
[2] https://www.tradecomplianceresourcehub.com/2025/07/07/trump-2-0-tariff-tracker/