REPUBLIKA.CO.ID, JAKARTA -- Bank Indonesia (BI) reminded the Ministry of Trade Affairs to monitor the follow up of US President Donald Trump’s order given to American Trade Secretary to investigate his country’s trade deficit. White House’s official website wrote it reached 500 billion US dollar in 2016.
American trade deficit to Indonesia was 13 billion US dollar. Deputy Senior Governor of BI Mirza Adityaswara said the country did not included in cheating countries as stated by Trump.
He said there were three requirements used by American government in categorizing cheating countries. First was the country with more than 20 billion US dollar per year of surplus trade to US. Referring to the categorization, Indonesia was not included into it.
The second was the country with surplus current account. In fact, Indonesia had 1.8 to 2 percent deficit of gross domestic product (GDP). The third was the country which conducted one way current intervention of its GDP up to 2 percent per year. The intervention of the country’s central bank made its exchange rate to America decreased, so the export would be cheaper.
"When there is fluctuation in Indonesia, BI goes to markets to avoid the weakening exchange rate of Rupiah. Trump targeted the countries which intentionally weaken their currency,” said Mirza in the Coordinating Ministry of Economic Affairs in Jakarta on Wednesday (April 5).
Also read: Trump calls Indonesia as "trade cheater", Jusuf Kalla: US should exercise introspection
However, Mirza reminded Indonesian Government, especially the Ministry of Trade Affairs to keep monitoring the Omnibus Report issued by US Defense Ministry within the next 90 days. BI would also monitor the currency.
Previously, American President Donald Trump said Indonesia and some South East Asian countries often cheated in conducting bilateral trading. Investvine.com reported Trump asked US Trading Ministry to investigate 16 countries which considered cheating. He had never given any details of the accusation.
“They are cheaters! From now on, those who break the rules will face the consequences and they’ll be very severe consequences,” said Trump to Investvine.com.
Trump said cheating countries led America into 502 billion US dollar of trade deficit. He asked the ministry to investigate it within 90 days.
For the accusation, Indonesia and Malaysia potentially experienced lower trade on natural rubber, palm oil, machinery and semiconductor. Vietnam had the same potential on the trading of clothes, shoes and electronics.
However, American Trade Ministry Wilbur Ross said US deficit was not only caused by alleged cheating on trading. It also caused by some problems found in crude oil export and import and the high price of raw materials import to US.
Trump pointed to 16 countries as cheaters, among others were China, Japan, Germany, Mexico, Ireland, Italy, South Korea, India, France, Swiss, Taiwan, Canada, Vietnam, Thailand, Malaysia and Indonesia. He issued two executive orders targeted on cheating foreign importers. He said it was a historical moment to return the national trade deficit.
Trump announced that other countries led the US to imbalance trade. “Thousands of companies steal from our country, but the silent American now had their voices in White House,” said him as published by USA Today.
US Government planned to conduct public meeting to hear the testimony from its manufacturers, providers, workers, farmers, and consumers. The executive orders stated that White House was submitting a proposal of new export regulation. It would ask them to issue an obligation before allowing the commodity to enter American harbors. Government Accountability Office said importers had had more than 2.3 billion US dollar of loans since 2001.
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