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A Qualitative Policy Analysis of the Trump 2.0 Universal Tariff Sabila, Alana
Journal of Entrepreneurship & Business Vol. 6 No. 3 (2025): Journal of Entrepreneurship and Business (October)
Publisher : Program MM Universitas Surabaya

Show Abstract | Download Original | Original Source | Check in Google Scholar | DOI: 10.24123/jeb.v6i3.7893

Abstract

Purpose: The United States’ April 2025 “Trump 2.0” order— combining a blanket 10 percent tariff with country-specific “reciprocal” surcharges—represents the largest single expansion of U.S. protectionism since the 1930s. For Indonesia, the measure imposes a 32 percent duty on its exports, threatening one tenth of merchandise sales and large segments of Java’s labour-intensive manufacturing. This study provides an early-stage qualitative policy analysis of the shock. Method: A triangulated research design integrates: (i) comparative historical review of past U.S. tariff waves; (ii) desk analysis of high- frequency customs and freight data through March 2025; and (iii) input–output tracing with the 2021 Indonesian Supply–Use Table to assess import-content vulnerability. Result: Findings indicate a first-year export shortfall of ~USD 1 billion (0.3 % of GDP), with 55 % of exposure concentrated in HS 85 electrical machinery, HS 61–62 apparel, and HS 64 footwear. A 10 % rupiah depreciation would raise production costs by 4.7 % in West Java electronics and 3.2 % in Central Java garments, given import coefficients of 0.47 and 0.32. Indirect spillovers are significant: China and ASEAN supply 65 % of Indonesia’s intermediate imports and are discounting diverted components, threatening assembly-line utilisation below the 85 % shutdown threshold. Policy resilience requires a five-point package: surplus-management diplomacy, selective MFN concessions on U.S. capital goods, accelerated Asia– Africa market diversification, safeguards against diversion imports, and coordinated macro-financial support for export-oriented SMEs. Future research should combine post-implementation customs data with firm-level panels to measure household income effects and evaluate mitigation efficacy.
Tariff Wars as a Prisoner’s Dilemma: A CGE-Game Theory Analysis of Trump 2.0 vs. BRICS Sabila, Alana
TRANSEKONOMIKA: AKUNTANSI, BISNIS DAN KEUANGAN Vol. 6 No. 1 (2026): January
Publisher : Transpublika Publisher

Show Abstract | Download Original | Original Source | Check in Google Scholar | DOI: 10.55047/transekonomika.v6i1.1134

Abstract

Backgrounds: The prospect of a “Trump 2.0” trade regime has revived concerns over universal tariffs and retaliation, especially for GVC-integrated emerging economies like Indonesia, where the key dilemma is whether unilateral or reciprocal tariffs provide strategic gains. Existing studies typically treat tariffs as exogenous CGE shocks or analyze tariff games separately, leaving the interaction between strategic behavior, general equilibrium effects, and value-chain transmission underexplored. Objectives: This study investigates whether strategically chosen bilateral tariffs between the United States and Indonesia within a broader US–BRICS context produce a non-cooperative Nash equilibrium and assesses its welfare, trade-balance, and GVC implications relative to cooperative outcomes. Methodology: An integrated framework is developed that nests a formal tariff game within a GTAP v11 CGE model. Bilateral tariff combinations of 0, 10, 20, and 30 percent are simulated to solve for Nash equilibrium and identify prisoner’s dilemma properties. Welfare, measured by equivalent variation, trade-balance changes, and TiVA-style backward and forward GVC indicators, are extracted under both welfare-based and mercantilist payoff structures. Findings: A unique Nash equilibrium emerges at zero tariffs. Any positive tariff reduces the initiator’s payoff, confirming a prisoner’s dilemma. Unilateral tariffs may temporarily improve Indonesia’s trade balance via import compression but generate larger welfare losses, while mutual protectionism harms welfare and trade balances through GVC disruptions. Conclusions: Tariff escalation is a dominated strategy once general equilibrium and value-chain effects are internalized. Coordination and targeted unilateral reforms dominate mercantilist protectionism, reinforcing free trade as the best response even under trade-balance-oriented preferences.