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Today's Headlines USA
On 7 June 2021 Indonesia Investments released its new report, titled Road to Net Zero Emissions. In this report we discuss a selection of relevant topics (related to politics, the economy, and social matters) with a special emphasis on how political, ideological, and socio-economic developments in the West impact on Indonesia. One might wonder to what extent does Western imperialism in Asia continue up to the present day?
On 4 December 2020 Indonesia Investments released its November 2020 report. This report zooms in the US presidential election, and specifically the impact it may have on Indonesia-US relations. Other important topics that are analyzed in the report include the extension of Indonesia's status as a beneficiary country in the US GSP facility, the signing of the Asia-Pacific Regional Comprehensive Economic Partnership (RCEP), and Indonesia's Q3-2020 economic growth.
The 2020 United States (US) presidential election, held on 3 November 2020, was a fascinating one. The battle between incumbent US President Donald Trump and his rival Joe Biden (the Democratic Party’s candidate) was so close that election night ended without a clear winner. For those who favor one candidate over the other, it was (and is) an emotional roller coaster. For Indonesia Investments, which takes a neutral stance in the election, it is simply a fascinating course of events.
It is important to put Indonesia into international context because decisions that are made by Indonesian policymakers are (partly) based on global developments.
In line with expectations, the US Federal Reserve decided to raise its benchmark interest rate by 25 basis points to the range of 2.00 - 2.25 percent at the September policy meeting that was concluded on Wednesday 26 September 2018. It is the Fed's eight rate hike since 2015 and the third one so far in 2018.
Those who invest in Indonesian assets (or actually in any assets across the globe) will need to carefully monitor two matters this week. First, the upcoming Federal Reserve policy meeting (scheduled for 25-26 September 2018) that will most likely result in another interest rate hike. And secondly, the latest developments in USA-China (trade) relations.
Earlier this week US President Donald Trump announced plans to impose 10 percent import tariffs on USD $200 billion worth of Chinese export products by 30 August 2018, thus further escalating the trade war between the USA and China. While earlier US tariffs focused mostly on industrial goods, the new list of proposed import tariffs includes various commodities (metals, energy and agriculture) as well as consumer products. As a result most commodity prices were in red territory on Wednesday (11/07).
In early April 2018 the United States confirmed steep anti-dumping duties and countervailing duties on Indonesian biodiesel imports. Published through the Federal Register the US imposed additional duties that range between 126.97 percent and 341.38 percent. For sure, this seriously harms the competitiveness of Indonesian biodiesel shipments to the world's top economy. If the policy is not altered, then it basically means the end of Indonesian biodiesel exports to the US market.
Despite the selloff on Wall Street overnight where the Dow Jones Industrial Average plunged 1.9 percent, the S&P 500 tumbled 2.23 percent, while the Nasdaq Composite dropped 2.74 percent, losses in Asia were less severe on Tuesday morning (03/04) as these losses were kept below 1 percent, overall. The selloff on Wall Street, partially driven by a sell-off of tech industry giants, was the weakest start of the second quarter for US shares since the Great Depression.
After the World Trade Organization (WTO) had ruled, largely, in favor of Indonesia (in January 2018) in the battle between Indonesia and the European Union (EU) regarding the latter's anti-dumping duties on Indonesian biodiesel exports, Indonesia has now also won its appeal at the EU court. The European Court of Justice, the highest court in the EU, ruled that the bloc needs to scrap its anti-dumping duties on imports of Indonesian biodiesel products that range between 8.8 - 23.3 percent.
Latest Columns USA
I have been living in Indonesia for more than eight years (and before permanently moving to this beautiful country I had been visiting Indonesia frequently since late- 1998). But although I’m currently far away from the West, I’ve never been following Western politics and Western media closer than I am doing now - and with Western politics I mainly refer to the political and (interrelated) social developments in the European Union (EU) and the United States (US).
Contrary to our usual coverage, in this edition of the monthly Indonesia Investments’ report there is some emphasis on political and socioeconomic developments in the West (referring to the United States and the European Union). The main reason for this is that the West – and we have seen this throughout history (for example during colonial days) – has a huge influence on the rest of the world, including Indonesia.
As stock markets continue to trade near precarious highs and an underlying current of geopolitical uncertainty continues to limit the outlook for equities in 2019, it is not entirely surprising to see going prices rallying. Indeed, this has been our price forecast for several weeks. But the confirmation of these forecasts came as the result of new evidence indicating weakness in US labor markets and rising expectations that the Federal Reserve will be forced to reduce interest rates more than previously anticipated.
U.S. stock markets continue to hover near record levels as trade policy conversations between President Donald Trump and President Xi Jinping define the relationship between the world’s two largest economies. The Dow Jones Industrial Average is currently trading just shy of 26,000, which is a psychological level that is often closely-watched by the financial markets.
Across the world, leaders express criticism on US President Donald Trump's decision to officially recognize Jerusalem as the capital city of Israel. Moreover, Trump announced that the American embassy is to be relocated from Tel Aviv to Jerusalem. While Trump claims that these decisions constitute a step to advance the peace process and emphasizes that the US will continue to facilitate the peace process between both sides, fierce criticism unleashed following Trump's statements.
Now the United States - under the Donald Trump administration - are focused on their "America First" policy, China is able to increase its influence in the Asian region. This was apparent at the 30th Association of Southeast Asian Nations (ASEAN) summit on April 26-29 at the Philippine International Convention Center in Pasay City where regional leaders expressed their support for the denuclearization of North Korea but were reluctant to discuss the tensions around the South China Sea.
The Indonesian government is currently studying the opportunities and challenges with regard to the making of a new bilateral trade deal with the USA. These efforts are a side-effect of US Vice President Mike Pence's recent visit to Indonesia when he signed 11 trade and investment deals worth a combined USD $10 billion.
Mike Pence, the Vice President of the United States, visited Indonesian President Joko Widodo on Thursday morning (20/04) at the presidential palace in Jakarta as part of Pence's Asia-Pacific tour (15-25 April 2017). Main goals of Pence's visit to several Asia-Pacific nations are to enhance diplomatic relations, improve regional security cooperation, and seek fairer trade. Pence arrived in Jakarta on Wednesday evening, directly from Japan where he emphasized US commitment to rein in North Korea's nuclear and missile ambitions.
As promised US President Donald Trump pulled the United States out of the Trans-Pacific Partnership (TPP), an ambitious free trade deal that was signed in October 2015 (after five years of negotiating) and had created the world's largest free trade area (covering 12 countries and 40 percent of global trade). Trump's move to withdraw the USA from the TPP implies that he distances the USA from its Asian allies and gives China the opportunity to fill in the empty space that is left by America.
Indonesia has always been hesitant to join free-trade deals with other nations on fears that domestic industries cannot compete with foreign counterparts, which could lead to an influx of cheaper, yet higher-quality foreign products. During his visit to the White House, Indonesian President Joko Widodo said Indonesia intends to join the Trans-Pacific Partnership (TPP) trade deal. Back home, this statement led to concern. What are the negative consequences for Indonesia when joining this deal?
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