• Amalia Adininggar Widyasanti Amalia Adininggar Widyasanti is a PhD graduate from Department of Economics, University of Melbourne, Australia. She is currently a Director of Macroeconomic Planning and Statistic Analysis at Ministry of National Development Planning (BAPPENAS)
Keywords: trade, macroeconomy, Indonesia, Japan


The swings of global trade in recent decades have been resulted from the global economic crisis and unfavorable condition of global situation. Deterioration of private demand -- as a result of economic crisis and increase of unemployment – has been the main reason of worsening global trade. This condition has, of course, affected economic performance of countries through trade channels. Furthermore, the recent trade agenda following to Trump administration has created another uncertainty to the world economy. This paper studies the impact of new trade agenda, which is represented by Trump’s plan on trade policy, to the world economy as well as to Indonesian and Japanese economy in particular. The analysis is based on computable general equilibrium of GTAP model version 6, with two scenarios: (i) Trump Trade Agenda when implementing 45 and 35 percent tariff to China and Mexico; (ii) Trade Hit List when imposing tariff to the 16 countries in the trade hit list. Impacts of both scenarios are examined in short run and long run. The results suggest that both scenarios in the short run will not create any significant effect to global economy as whole nor to Indonesian and Japan in particular. However, their impacts to the global economy, Indonesia, and Japan will be substantial in the long run. Therefore, Indonesia and Japan in particular should concern on providing sound economic policies to reduce the risk of new trade agenda to these economies in the long run. Some policy recommendation provided in this paper are: (i) Japan should focus on improving technological innovation to realize the implementation of society 5.0 and industry 4.0 as scheduled; (ii) Indonesia should facilitate more investment to its economy and provide more government investment to induce accumulation of capital stock in the future. Furthermore, efficiencies and technological adoption should also be main concern of the Indonesian government to induce productivity of the economy and help mitigate the global risks in the long run.


Andersen, L. and R. B. (2008). The Link between Openness and Long-Run Economic Growth.
Journal of International Commerce and Economics, US International Trade Commission.
Francois, J. et. a. (1996). Liberalization and Capital Accumulation in GTAP Model, GTAP
Technical Paper.
Kawasaki, K. (2017). Emergent Uncertainty in Regional Integration – Economic Impacts of
Alternative RTA Scenarios (GRIPS Discussion Paper). Japan.
Levchenko. (2009). The Collapse of International Trade during the 2008-2009 Crisis: In Search
of the Smoking Gun. IMF Seminar Paper.
Mayer, J. (2010). Global Rebalancing: Effects on Trade Flows and Employment (UN Discussion
Paper No. 200).
Scherrer, C. (2017). Trump’s Trade Policy Agenda: More Liberalization. Retrieved from http://
Shivarov, A. (2014). Diversity in Bulgarian Foreign Trade. Journal of Ikonomik. Retrieved from 63-71.pdf
The European Financial Crisis. (n.d.). Analysis and a Novel Intervention. Harvard University.
UNDP. (2011). Export Dependence and Export Concentration, in Towards Human Resilience:
Sustaining MDG Progress in an Age of Economic Uncertainty.
Walmsley, T. (1998). Long Run Simulations with GTAP: Illustrative Results from APEC Trade
Liberalisation (GTAP Technical Paper).
Were, M. (2015). Differential effects of trade on economic growth and investment: A crosscountry
empirical investigation. Journal of African Trade, 2, 1–2.
WTO. (2017). Trade Statistics and Outlook. Retrieved from