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US tariff policy bucks economic theory, says Sri Mulyani
The finance minister, a seasoned economist, has criticized Trump's tariff policy as devoid of any basis in economic science, while highlighting the resulting turmoil in global trade as presenting a fresh opportunity for Indonesia.
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Finance Minister Sri Mulyani Indrawati (second right, front) prepares for a press conference at the ministry’s offices in Central Jakarta on March 13, 2025, along with her deputies (from left, front row) Anggito Abimanyu, Suahasil Nazara and Thomas Djiwandono. (TJP/Deni Ghifari)
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inance Minister Sri Mulyani Indrawati has criticized the import tariff policy of United States President Donald Trump, which is quickly upending global trade norms, as laying outside established economic theory.
Speaking on Tuesday at a public economic forum attended by government officials, businesspeople, economists and journalists, the minister said the unfolding impact of US tariffs was uncharted economic territory.
“America’s reciprocal tariffs against 60 countries illustrate a tariff calculation which, I think, no economists, [people] who have studied economics, will understand. So, economics no longer applies,” said Sri Mulyani.
“[The US] just wants to impose tariffs to close the [trade] deficit. There’s no science of economics there. Closing the deficit means, I don’t want to rely on or buy from others more than what I can sell to others,” she continued, adding that this was a “purely transactional” practice with no scientific foundation whatsoever.
The minister described the fallout from the US tariff policy over the past month as “surprising”, seeing as the global economic landscape was changing swiftly from being “governed by a rules-based” order to certainties vanishing in the blink of an eye.
Sri Mulyani did not clarify what she meant by rules-based order, a term that has been used selectively by governments around the world, usually to accuse other countries of breaking the rules.
The US had imposed import tariffs on products from its traditional trading partners Canada and Mexico, “which changes the order of alliances”, Sri Mulyani said. She called that practice “pragmatic”, and pointed out that President Prabowo Subianto had warned of upheaval early in his administration.
