President Donald Trump signed an executive order imposing new tariffs on goods imported from key trading partners like Canada, Mexico, and China (1/2/25). The tariffs include a 25% tax on imports from Canada and Mexico, with a 10% tax on Chinese imports. These tariffs aim to address trade imbalances and the ongoing issue of fentanyl smuggling, according to Trump’s statements.

The tariffs are expected to affect a wide range of products, including electronics, textiles, and pharmaceuticals. However, big tech companies, which often rely on parts from countries like China, are notably silent about these new measures. Major firms like Apple, Google, Meta, and Microsoft have declined to comment, although industry groups have raised concerns about the potential impact.

Industry representatives such as Jason Oxman from the Information Technology Industry Council urged the Trump administration to seek constructive negotiations with foreign governments. Additionally, the Entertainment Software Association (ESA) warned that tariffs on video game consoles and related products could impact consumers nationwide.

For big tech, the tariffs are a double-edged sword. While they aim to bring more manufacturing back to the US, the short-term impact on prices could be steep. Analysts warn that the 25% tariff on Chinese electronics could raise the cost of consumer electronics, such as smartphones, tablets, and game consoles, by up to 40%. This is likely to result in higher retail prices for consumers, affecting demand and possibly reducing sales.

Trump’s push to incentivize US manufacturers by imposing tariffs comes amidst broader trade tensions between the US and its key trade partners. These tensions are already affecting the global market. For instance, automakers have already signaled their concern about the potential rise in costs due to tariffs on automotive products. The risk of retaliatory tariffs from China, Canada, and Mexico could also further exacerbate trade relations.

In a significant development, Trump mentioned DeepSeek, an AI company, in his speech, indicating that technology sectors like AI might see lower costs in the future due to tariffs and manufacturing shifts. However, experts argue that the focus should be on whether these policies can truly make US companies more competitive on the global stage or simply raise costs for consumers.

Another point of contention is the possible future tariff on semiconductors and computer chips. With the global demand for these components soaring, a potential tariff on foreign-made chips could have a ripple effect across multiple industries. Companies like Nvidia, Apple, and Intel are especially vulnerable to this shift, given their reliance on imports for manufacturing.

Impact on Indonesia: Trade and Investments at Risk

In Indonesia, there is concern about the broader impacts of these tariffs on the economy. Indonesian exporters could face higher costs when shipping goods to the US, affecting industries like textiles, which account for a significant portion of Indonesia's exports. As tensions rise, experts warn that the trade dispute could further strain US-Indonesia relations and potentially reduce foreign investment.

While Trump’s policies may be aimed at protecting domestic industries, their real-world consequences are still unfolding. Economists predict that the US may see an inflationary spike, while global trade disruptions could reduce overall economic growth.

SOURCE: THE VERGE, CNBC INDONESIA

PHOTO: AP

This article was created with AI assistance.