The Impact of Trump's Reciprocal Tariffs on the Economies of Indonesia and the United States: A Computable General Equilibrium (CGE) Analysis
DOI:
https://doi.org/10.31685/kzzy3x70Keywords:
Reciprocal Tariff, International Trade, CGE analysisAbstract
The reciprocal tariff policy implemented by the Donald Trump administration against various countries has triggered new dynamics in international trade and has the potential to impact economic stability. This study aims to analyze the impact of this policy on the Indonesian and United States economies, with a focus on changes in real gross domestic product, terms of trade, labor demand, welfare, and sectoral output. The research method uses the Computable General Equilibrium (CGE) Model with the Global Trade Analysis Project (GTAP) version 11. The analyzed scenarios are divided into three: (1) the implementation of a unilateral US baseline tariff of 10%, (2) the addition of Indonesia's reciprocal tariff of 32% above the baseline tariff, and (3) an effective tariff 19% accompanied by the exemption of US import tariffs on Indonesia. The simulation results show that all three scenarios have an impact on the economy. The higher the tariffs the US sets, the greater the impact on the economy.
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