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Jakarta Post

Insight: US-China trade war has done Indonesia more good than harm

  • Lili Yan Ing and Yessi Vadila

Jakarta   /   Wed, February 6 2019   /  12:33 am

The United States and China are racing against time to resolve their trade dispute before the March 2 deadline. The US increased tariffs on its Chinese steel and aluminum on March 9, 2018, but an agreement remains elusive.

It is estimated that if the US implements duties as threatened, the average tariff on American imports will rise by 3.4 percent and companies will pass these costs onto customers. Many US economists have warned that, in the end, American producers and customers will bear the costs. A 2017 study by Warwick McKibbin estimates that the policy will lower US gross domestic product by 1.2 percent.

As things develop, however, the US tariff barriers hardly reduce its deficits vis-à-vis China. The US International Trade Commission found the US trade deficit reached US$375 billion in 2017, while between January and October 2018, the deficit hit $345 billion, up ...