[hanomantoto]

TEMPO.CO, Jakarta – Finance Minister Sri Mulyani Indrawati explained the implications of the Republican’s victory on the domestic and global economy as Donald Trump defeated Kamala Harris in the U.S. general election.

“Donald Trump was re-elected in the election, which will result in many policy changes,” said Sri Mulyani during the State Budget Performance Conference at the Ministry of Finance Office in Central Jakarta on Friday, November 8, 2024.

The Finance Ministry has identified five potential policies that may be implemented. These include corporate tax cuts, expenditure expansion, and trade protectionism. In addition, there is a possibility of pushing for a ceasefire and low commitment to climate change issues.

The protectionist stance is expected to increase import tariffs on countries that trade with the U.S., particularly China. The state treasurer explained that Trump’s response to climate change is different from President Joe Biden’s.

“This will certainly affect global oil prices, as well as trends related to climate change and energy issues,” the former World Bank managing director said.

As a result, global energy commodity prices could fall. For example, oil, coal, and gas contribute to non-tax government revenues or PNBP.

This projection has already had an impact, even before Trump is officially sworn in. “U.S. Treasury yields, particularly 10-year yields, have risen on expectations of an expansionary U.S. government budget,” she said.

A 4.4 percent rise in the 10-year U.S. Treasury bond caused the dollar to strengthen. The impact is widespread, as she mentioned that dollar transactions worldwide exceed 50 percent.

The strengthening of the U.S. dollar index following Trump’s re-election has stressed the rupiah this week. Despite this, Sri Mulyani mentioned that the rupiah exchange rate has strengthened to Rp15,200 per US dollar. Today’s trading closed the rupiah at around Rp15,600 per dollar.

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