IHS Markit estimated, the United States (US) economy fell at a 35.3 percent in the second quarter, which subtracts about 25 percentage points from GDP growth - Photo by White House

JAKARTA (TheInsiderStories) – The flurry of of trade sanctions initiated by the United States (U.S) administration against several countries, such as Indonesia, China, Iran and Russia, may slow global economic growth, several analyst said. The sanction also could damage the global economic structures.

Currently, President Donald Trump’ administration are willing to implement economic sanctions to further U.S. foreign policy interests. According to Rajiv Biswas, Chief Economist at IHS Markit, the impact will be most felt in Asia Pacific.

He said the tit-for-tat trade war will lower economic growth in Asia Pacific by 1 per cent this year alone. Meanwhile, The International Monetary Fund (IMF) estimated that the global economy may grow 0.5 per cent lower than its initial project in 2020 if full-blow trade war takes place. That equals to slashing US$340 billion from the world economy.

Indonesia could become another victim to U.S trade sanctions. The United States seeks to impose trade sanctions on Indonesian goods worth US$350 billion after winning a World Trade Organization (WTO) case that ruled Indonesia restricted imports of food, plants and animal products.   

The G-20 Forum had been seen as failing to make a case supporting free trade in its last Finance Ministers Meeting in July. G20 finance ministers and central bank governors warned that increasing trade tensions risk undermining the global economy.

The global policy makers emphasized the need “to step up dialogue and actions” between countries to minimize risks to global growth and improve confidence on trade. It also noted “downside risks” posed to the global economy as a result of “heightened trade and geopolitical tensions.”

Followed the G-20 forum, Trump met European Commissioner Jean-Claude Juncker at the White House talked on trade and agreed to hold the implementing import tariffs on European automakers.

Meanwhile, A summit by BRICS countries, Brazil, Russia, India, China and South Africa also delivered a stronger defense for free trade and seeks a broader global support.


For Indonesia, U.S has asked the WTO to impose sanction to Indonesia following its winning a trade dispute. The U.S business lost some the US $350 million.

U.S Trade Representative Robert Lighthizer said in official statement that the WTO confirmed that Indonesia’s import licensing regimes for horticultural products and animal products are inconsistent with WTO rules. Indonesia maintains a complex web of import licensing requirements that restrict or prohibit imports of horticultural products and animal products from the U.S.

He said, these restrictions cost U.S. farmers and ranchers millions of dollars per year in lost export opportunities in Indonesia. The WTO upheld the original panel findings in the dispute that all 18 Indonesian measures challenged by the U.S are inconsistent with Indonesia’s WTO obligations and are not justified as legitimate public policy measures.

In responding to WTO’s decision, Coordinating Minister of Economic Affairs Darmin Nasution said, the government has revised the policies in the ministry level but would need additional time to issue a Government’s Decree or Law.

Indonesia is the fourth most populous country in the world and an increasingly important export market for many U.S. agricultural products. America exported over $2.6 billion in agricultural products to Indonesia and vice versa imported over $2.8 billion in agricultural products from Indonesia.

Iran Sanction

Recently, U.S also taking action to reimpose nuclear-related sanctions with respect to Iran that were lifted in connection with the Joint Comprehensive Plan of Action of July 14, 2015 (JCPOA). These actions include reimposing sanctions on Iran’s automotive sector and on its trade in gold and precious metals, as well as sanctions related to the Iranian rial. These measures will take effect on August 7, 2018.

All remaining United States nuclear-related sanctions will resume effective November 5, 2018. These include sanctions targeting Iran’s energy sector, including petroleum-related transactions, as well as transactions by foreign financial institutions with the Central Bank of Iran.

Previously, U.S also give nuclear-related sanction for North Korea. Mandatory sanctions are applicable for facilitating the purchase of certain minerals (gold, copper, silver), rocket or aviation fuel, or other supplies that can be used for North Korean aircraft or ships.

Other countries has get sanctions from U.S are Russia, China, Venezuela and India. According to some analysts, instead of saving the American economy, Trump measures can be considered as disrupting the global economy.

They reminded Trump, if this step continues to be carried out the U.S economy will be threatened and could even be ostracized by the world.

Email: linda.silaen@theinsiderstories.com