What Are Trump Tariffs and How Do They Affect Everyday Economic Conditions?




You may have heard about the "Trump tariffs" that have been widely discussed lately. But did you know this policy could influence the prices of goods you buy, the jobs available, and even national economic stability? For example, in March 2025, Indonesia recorded a trade surplus of $4.33 billion, the highest in four months, partly because exporters rushed to ship goods before new U.S. tariffs took effect.

What Are Trump Tariffs?

Trump tariffs refer to the trade policies implemented by former U.S. President Donald Trump, which imposed high tariffs on imported goods. During his presidency, Trump raised the average U.S. tariff rate from 2.5% to around 27%—the highest in over a century. For Chinese products, base tariffs were increased by up to 145%, prompting China to retaliate with 125% tariffs on U.S. goods.

Global Impact: Slower Trade and Economic Growth

The World Trade Organization (WTO) has warned that Trump tariffs could lead to a decline in global trade. In 2025, global goods trade growth is projected to drop from 2.7% to just 0.2%. In the worst-case scenario, global trade could shrink by 1.5%, dragging world economic growth down to 1.7%.

Impact on Indonesia: Exports Under Pressure, Economic Growth at Risk

Indonesia is among the countries facing reciprocal U.S. tariffs of 32%. This affects multiple sectors, including textiles, electronics, and agriculture. The World Bank estimates that these tariffs could cut Indonesia’s economic growth by up to 0.5%, depending on how the policies unfold.

Industries Most Affected

Some of Indonesia’s most vulnerable industries under Trump tariffs include:

  • Textiles and Apparel: Exports to the U.S. total $4.5 billion, and new tariffs could weaken the competitiveness of Indonesian products.
  • Agriculture and Plantations: Indonesian palm oil faces environmental barriers and additional tariffs, threatening exports of CPO and its derivatives.
  • Electronics and Components: Higher tariffs may increase production costs and reduce demand from the U.S. market.

Direct Impact on Daily Life

Trump tariffs don’t just affect international trade—they also directly influence daily life:

  • Higher Prices for Goods: Imported products become more expensive, and these additional costs are often passed on to consumers. This may mean you would have to readjust your daily cash flow, if needed.
  • Fewer Job Opportunities: Industries hit by tariffs may cut production or even lay off workers.
  • Declining Investment: Trade uncertainty makes investors hesitant, potentially slowing economic growth.

What Can You Do?

As a consumer and citizen, you can:

  • Support Local Products: Buying domestically made goods helps reduce reliance on imports.
  • Stay Informed on Economic Developments: Understanding trade policies and their effects can help you make better financial decisions.
  • Encourage Public Dialogue: Participating in discussions about economic policies can contribute to better solutions for everyone.

Trump tariffs have created new challenges for both the global and national economy. By understanding their impact, you can better prepare for changes and contribute to constructive solutions.