US Tariff Retaliation May Darken Global Outlook: Sri Mulyani
Finance Minister Sri Mulyani Indrawati has warned that US tariff retaliation could harm the global economy in the second quarter. Trade tensions between major economies are rising, causing concern among investors and policymakers.
At an economic forum this week, Sri Mulyani said that protectionist moves—especially from the United States—could slow global trade. She noted that supply chains are already fragile. Any new tariffs would add pressure.
“Protectionism is on the rise again. This time, it’s more aggressive and systemic,” she said. “The world economy cannot absorb another round of tariff escalation without consequences.”
Q2 Recovery Now at Risk
Sri Mulyani pointed out that Q2 might have been a chance for mild recovery. But the threat of US tariff retaliation now puts that in doubt. Growth forecasts may need to be revised.
Emerging markets face the highest risk. These countries rely on trade. They also have limited tools to cushion external shocks. Higher tariffs may increase import costs, weaken local currencies, and hurt investment.
“Once the tariffs take effect, we’ll likely see rising inflation, weaker consumer demand, and falling investment,” she said.
Trade War Escalates
Recent tariffs come from new disputes over tech, subsidies, and national security. The US has already moved against China and the EU. Both have responded with countermeasures.
Sri Mulyani believes politics are now shaping economic policy. That adds more uncertainty. Investors may struggle to predict what comes next.
“The global economy is no longer shaped by market forces alone. Political decisions now play a major role,” she added.
Indonesia on Alert
Indonesia is not directly hit by these tariffs. But as a trade-reliant country, it may still feel the impact. A slowdown in China or the US could hit exports.
The Finance Ministry is preparing for worst-case scenarios. This includes boosting local demand and finding new trade partners. Sri Mulyani stressed the need for fast, flexible responses.
Conclusion
Sri Mulyani’s warning is clear: US tariff retaliation could stall global growth in Q2. With protectionism on the rise, governments must act quickly. Adapting to this changing trade landscape will be key to staying resilient.