Jakarta. US President-elect Donald Trump's 2024 election victory is anticipated to bring significant economic implications for Indonesia due to expected shifts in American policy.  Finance Minister Sri Mulyani addressed these potential changes during a state budget press conference at the Finance Ministry on Friday.

“Many policies will change because Trump, as a Republican, has different priorities compared to President Joe Biden, who is a Democrat,” Sri Mulyani said.

She highlighted Trump's plans to reverse Biden's climate initiatives, including the Inflation Reduction Act. According to a recent analysis by Carbon Brief, under Trump, the US would likely see increased emissions through 2030, nearly matching the combined annual CO2 output of the European Union and Japan. Biden’s current climate goals aim for a 50-52 percent reduction in US greenhouse gas emissions by 2030 from 2005 levels, but under Trump, reductions might only reach about 28 percent below 2005 levels.

“This shift will affect global oil prices and influence climate and energy trends in the future,” Sri Mulyani explained.

Indonesia's oil and gas imports reached $28.5 billion in the January-September 2024 period, marking a 3.8 percent increase from the same period last year. 

Additionally, she noted the continuation of the US-China trade war under Trump, who has pledged a blanket 60 percent tariff on all Chinese exports to the US. The US and China are Indonesia's largest trading partners.

“Policy shifts like these will provoke market reactions, including corporate tax cuts, spending expansion, and tariff increases, especially in China. We need to be prepared for these changes,” she added.

Sri Mulyani highlighted the resilience of the US economy, which is growing at 2.7 percent, with a strong labor market and a declining unemployment rate of 4.1 percent. Inflation has also fallen to 2.4%, leading the Federal Reserve to cut its key interest rate by 25 basis points on Friday, following a previous half-point reduction in September.

“The US economic recovery is occurring domestically, but as a major economy with the globally dominant US dollar, these developments will inevitably affect the global economy, including Indonesia,” she concluded.