Indonesian experts warn trade protectionism hurts global economic stability

Trade protectionism threatens global economic stability, and the high import tarrifs imposed by the United States harm the interests of other countries, Indonesian experts warned in exclusive interviews with Xinhua.

Prof. Fredy BL. Tobing, a chief expert in international relations at Indonesia University, was deeply concerned about the trade friction between the U.S. and China. The U.S. raised import tariffs on more-competitive Chinese products and put unfair sanctions on Chinese companies, he said.

Furthermore, the action would significantly affect the Indonesian economy as a collateral damage, as China and the U.S. are both Indonesia's trading partners, Tobing said.

"If the U.S.-China trade tension prolongs, it may eventually imperil Indonesia's foreign investments and currency exchange rates in the future," he said, adding that China is Indonesia's largest trade partner and major source of foreign capital in the country at present.

On the Indonesian economy, he estimated that Indonesia may face big challenges to meet its growth target of 5.3 percent this year.

"The world needs the normalization of U.S.-China trade relations," Tobing pointed out that Asian economies, which are closely related to China in terms of trade and investments nowadays, would immediately suffer from the trade tensions.

He also warned that the trade friction triggered by the United States goes against the trend of economic globalization.

Fithra Faisal, an expert of economy and business studies at Indonesia University, said that if the U.S.-China trade tension continues, the impacts would be catastrophic to global economy.

"A continuing trade friction between the U.S. and China may slow down the global economic growth by 0.8 percent," he said.

Under the grim circumstances, the G20 Osaka Summit is expected to send a positive signal to the world economy. Both experts agreed that global economies should exercise international cooperation mechanisms, like G20, to promote liberalization and facilitation for investment and trade so as to boost global economy, and the mechanisms should play down trade protectionism and jointly safeguard global economic stability.

By Abu Hanifah