Donald Trump triumphed over Kamala Harris of the Democratic Party in the 2024 U.S. presidential election, marking his second tenure in the nation’s highest office.
Trump’s victory was sealed as he garnered 277 electoral votes by Wednesday, November 6, 2024, around 5:30 a.m. local time (5:30 p.m. WIB). By Thursday, November 7, at 5:21 a.m. WIB, Trump had secured 265 electoral college votes, while Harris held 226.
The threshold for electoral votes in the U.S. to secure victory is 270.
Moreover, Trump captured the popular vote, amassing 72,083,871 votes (51%), compared to Kamala’s 67,274,910 (48%).
Trump surpassed the 270 mark after clinching Wisconsin, a pivotal swing state, with a 49% win. He also maintained a lead across other critical swing states, including Arizona, Michigan, Nevada, Georgia, North Carolina, and Pennsylvania.
“We have made history tonight for a reason,” Trump declared to his jubilant supporters, as reported by CNBC International.
“The reason is that we have overcome obstacles unimaginable to anyone,” he added, addressing his cheering crowd.
Implications for Indonesia
Reflecting on Trump’s previous administration (January 2017 – January 2021), the Jakarta Composite Index (IHSG) exhibited steady growth.
Data from Refinitiv shows that at the end of January 2017, the IHSG closed at 5,294, climbing to 5,862 by the end of January 2021, representing a 10.73% increase over four years.
IHSG Movements
The IHSG’s trajectory largely consolidated over that four-year span.
From early 2017 to early 2020, the index remained relatively static, before experiencing a sharp drop in March 2020 due to the COVID-19 pandemic. However, during the second half of 2020 through January 2021, the IHSG rebounded amid various market sentiments.
Meanwhile, the rupiah depreciated by 5.04%, sliding from IDR 13,347 per USD to IDR 14,020 per USD over the same period.
Rupiah Movements
This depreciation coincided with Trump’s policies, which resulted in a weakening U.S. Dollar Index (DXY), down 8.97% from 99.51 to 90.58.
Trump implemented these policies to bolster the competitiveness of American goods on the global market, thereby enhancing exports.
In terms of the Consumer Price Index (CPI), the U.S. economy appears likely to maintain stability, with a potential uptick in oil production, which could increase supply and lead to declining oil prices. However, a second phase of the U.S.-China trade war could fuel inflation, raising the cost of goods.
Consequently, the U.S. Federal Reserve’s interest rate cuts might face resistance, making it difficult for central banks globally, including Bank Indonesia (BI), to execute substantial rate reductions.
Indonesia’s Exports to the U.S. During Trump’s Era
Under Trump, Indonesia’s exports to the U.S. surged by 15.3%, from USD 16.14 billion in 2016 to USD 18.62 billion by the end of 2020. This growth outpaced the 8.52% rise seen in the last four years of Barack Obama’s administration.
Trump’s Tariff Policies
Throughout his campaign, Trump emphasized intentions to raise trade tariffs, especially targeting China. Katrina Ell, director of economic research at Moody’s Analytics, remarked that Trump’s trade policies could negatively impact Asia, given his protectionist stance and promises of more aggressive import tariffs into the U.S.
Trump’s isolationist approach to foreign policy also raises concerns about his commitment to defend Taiwan from potential Chinese aggression.
A critical question for Indonesia is whether Trump will alter trade tariffs on Indonesian imports.
In mid-2018, the U.S. under Trump reviewed Indonesia’s eligibility for the Generalized System of Preferences (GSP), a program that allows tariff-free access for goods from developing countries, potentially contributing to Indonesia’s trade surplus of approximately USD 9.5 billion with the U.S.
At the time, 124 products and sectors were under review, including plywood, cotton, and shrimp.
Three Risks in Financial Markets
Bank Indonesia Governor Perry Warjiyo identified three critical areas to monitor if Trump wins. These include pressure on the rupiah, potential strain on capital flows, and rising financial market volatility.
Warjiyo stated that a renewed Trump presidency could strengthen the U.S. dollar, driven by the upward trend in the Fed Fund Rate, the U.S. central bank’s interest rate.
“The dollar will strengthen, U.S. interest rates will remain high, and the trade war will inevitably continue,” Perry explained during a session with the House of Representatives Commission XI in Jakarta on Wednesday, November 6.
These dynamics will likely impact emerging economies like Indonesia. The rupiah may face depreciation pressures, while foreign capital inflows could tighten further.
“These developments will affect all emerging markets, including Indonesia, especially in terms of exchange rate pressure, capital flow volatility, and heightened uncertainty in financial markets,” he elaborated.
To mitigate potential risks from Trump’s victory in the U.S. presidential election, Perry said Bank Indonesia, together with the government and the Financial System Stability Committee (KSSK), remains committed to maintaining economic and financial market stability while supporting economic growth.
“We must respond cautiously, and Bank Indonesia will continue to prioritize stability while working closely with the government and KSSK to support sustainable economic growth,” Perry emphasized during the session with the House of Representatives Commission XI in Jakarta.
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