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Admin's note: This is a corrected version of the article, which originally appeared on IPS on 29 July here.
KUALA LUMPUR, Malaysia, Jul 29 2025 (IPS) - US President Trump has successfully used tariff threats to achieve economic, political and even personal goals. These threats, reminiscent of colonialism, have secured submission and concessions.
Indonesian template?
After hearing the 2024 US election results, Indonesian President Prabowo Subianto respectfully stood up in his Jakarta office to call to congratulate the winner.
Trump bragged about his tariff offer to Indonesia in mid-July 2025, profusely flattering its president. After initially hesitating, former General Prabowo agreed to join BRICS despite Trump’s clear disapproval.
“I spoke to their really great president, very popular, very strong, smart. And we made the deal. We will pay no tariffs … they are giving us access to Indonesia … the other part is they are going to pay 19% and we are going to pay nothing.”
An Indian commentator noted, “Those words say it all. This deal is clearly one-sided, and it should bother the whole world.” Americans, not Indonesians, will pay tariffs on imports from Indonesia.
The US is Indonesia’s second-largest export market, importing apparel, palm oil, footwear, and cosmetics. Initially, Trump had threatened a 32% tariff on such imports.
This has been reduced to 19%, still almost four times more than last year! In 2024, Indonesian exports to the US were taxed at 5% on average. The Indonesian president has not complained but instead seemed relieved.
Indonesia will lose not only exports, but also growth and jobs. As Trump loves to brag, he added insult to injury as he could not resist reiterating: “They will pay 19%, and we will pay nothing.”
Guaranteed sales
Indonesia will also buy $15 billion of US oil and gas, $4.5 billion of farm produce, and 50 Boeing jets. But the 2019 Lion Air plane tragedy, which the US plane manufacturer quickly blamed on Indonesian pilots, is still alive in the national memory.
Boeing’s reputation worldwide has not recovered from the investigation into the Nairobi air crash involving the same plane model, which led to its grounding.
Indonesia is among the US’s top 25 trade partners. The deal secures American access to the Indonesian market, allowing US goods to be sold tariff-free.
Last year, Indonesia shipped $28 billion worth of goods to the US. Higher tariffs are now expected to cut Indonesian exports by a quarter, GDP growth by 0.3%, and many jobs!
Other Southeast Asian lessons?
The Philippines’ Marcos II government is the most pro-US in Southeast (SE) Asia, hosting 11 American military bases.
Yet it was the only one without a US tariff offer before Secretary of State Rubio’s SE Asian visit earlier this month. The Philippines has since been offered a new US trade deal with the same 19% tariff rate despite its loyalty to Washington.
Loyal long-term support for the US, 11 military bases and serving as an additional ‘unsinkable aircraft carrier’ just south of Taiwan did not secure a better trade deal for the other archipelagic nation in SE Asia.
Trump wants trade deals even more favourable to the US than existing ones. With deadlines passing, the US is expected to announce more trade deals.
The tariff threats have been more effective for Trump, thanks to decades of trade liberalisation forced on the Global South, undermining earlier import-substituting industrialisation and food security measures.
Washington has already revised earlier demands, sometimes not just once, but typically to the chagrin of US trade partners. Vietnam’s Communist Party leader was initially thought to have negotiated a better deal than other SE Asian governments.
Lessons for others?
Will the US offer to Indonesia become a template for others? Or even for countries of comparable significance in the world economy? Nobody knows Trump’s strategy, let alone how it may still change.
Perhaps it begins with the threat of high tariffs, shock and awe. Then, a less painful deal is offered, dressed up as a concession.
This may be worse than the status quo ante, but it still seems preferable to the original threat. Nations will also be required to buy US goods that may not be needed or offer the best value for money.
Thus, US offers to SE Asia are being studied worldwide for lessons on better negotiating with Washington. Meanwhile, the US refuses to negotiate collectively except with the European Union.
All over the world, policymakers will continue to debate Trump’s tariff war strategy after Monday’s agreement in Scotland, which included a 15% baseline tariff on most EU exports to the US.
The US-EU deal makes clear the West, including Europe, has never really been committed to a rules-based international order, including multilateral trade liberalisation.
As American buyers pay the tariffs, imported goods become more expensive. US trading partners will lose exports, related growth and jobs. This will mean less expansion, employment and exports worldwide, deepening stagnation.
Meanwhile, most SE Asian governments believe they have little choice but to continue negotiating with the US, which is driving them to others willing to engage them on more favourable, if not fairer, terms.
Related IPS Articles
Original available here: Bullying Southeast Asia with Tariff Threats
KUALA LUMPUR, Malaysia, Jul 15 2025 (IPS) - Trump’s billionaire cronies want more monopoly profits, not competition. With more policies crafted for them, wealth concentration is set to become greater than ever.
Neoliberalism?
There is no clear consensus on what neoliberal economics stands for now. Many who claim to be liberal economists have different, even contradictory views.
Some demand market competition and oppose monopolies and oligopolies. For others, property rights are crucial, typically strengthening monopoly rights.
Many avowed neoliberals deemphasise competition and hesitate to insist on antitrust action or opposition to abuses of market power.
Property rights confer monopoly or exclusive ownership rights to an asset, typically denying access to others except for payment. Many such rights are recent.
While UK Prime Minister from 1979, Margaret Thatcher triggered a worldwide neoliberal economic counter-revolution, especially in the Anglosphere.
With generally more limited public ownership, the US economy has long been more ‘private’, offering little scope for privatisation.
Tech Big Bro
PayPal and Palantir founder Peter Thiel is the most influential of the so-called ‘tech bros’ supporting re-elected US President Donald Trump.
Thiel was the two-term president’s biggest funder for his unexpectedly successful 2016 campaign. As former boss, funder and mentor, he is now Vice President JD Vance’s godfather.
In 2014, Thiel’s ‘Competition is for Losers’ established him as the lead apologist for lucrative rentier monopolies, especially those invoking intellectual property rights (IPRs).
Thiel noted ‘perfect competition’ is “both the ideal and the default state in Economics 101”. In textbooks, firms in competitive markets are presumed to be similar, selling the same goods.
Hence, they have no ‘market power’ and must sell at market-determined prices. When demand rises, firms invest to increase supply, reducing prices and profits.
In mainstream economics, there can be no economic rent under perfect competition. But prices can be raised more easily in cornered markets.
Buyers will then have no other source to buy from. Without competition, monopolies can maximise profits by controlling market supplies and prices.
Hence, profit maximisation involves capturing more rents in monopolistic conditions. To become richer, firms eschew competition in favour of monopoly.
Government role contradictory
Tech ‘Big Brother’ Thiel notes, “To an economist, every monopoly looks the same, whether it deviously eliminates rivals, secures a license from the state or innovates its way to the top.”
The state’s role is contradictory as government “works hard to create monopolies (by granting patents to new inventions)” while enforcing antitrust law to undermine them.
Thiel claims to be uninterested in “illegal bullies or government favorites”, but surely knows governments create and sustain the monopolies he so cherishes.
He notes that “Americans mythologize competition and credit it with saving us from socialist bread lines”. But for him, “capitalism and competition are opposites”.
“Capitalism is premised on the accumulation of capital, but under perfect competition, all profits get competed away.”
The advocate of monopoly claims monopolists are “incentivized to bend the truth” and to “lie to protect themselves … [from] … being audited, scrutinized and attacked”.
Thiel unabashedly acknowledges that rentiers have every incentive to protect, disguise and “conceal their monopoly” and incomes.
Instead, the billionaire rentier wants monopoly powers and profits to grow faster without being taxed or having to share.
Monopoly best for capitalism?
Thiel acknowledges that monopolists accumulate rents in a static world.
But he insists they “invent new and better things … Creative monopolies aren’t just good for the rest of society; they’re powerful engines for making it better.”
He insists a monopoly is “so good at what it does that no other firm can offer a close substitute”. For him, “the history of progress is a history of better monopoly businesses replacing incumbents”.
The tech billionaire insists decades of monopoly profits provide a powerful incentive to innovate. Thus, monopolies continue to drive progress.
He denounces mainstream neoliberal economists as “obsessed with competition as an ideal state? It is a relic of history … Their theories describe … perfect competition because that is what’s easy to model.”
“In the real world outside economic theory, every business is successful exactly to the extent that it does something others cannot … Monopoly is the condition of every successful business.”
Monopolies thrive under Trump
Unsurprisingly, many supposed neoliberals today stress property rights while ignoring liberal economics’ claim to promote competition.
Competition is dismissed as 19th-century economic liberalism. Meanwhile, contemporary monopoly capitalism accelerates wealth and income concentration.
But Thiel exaggerates monopolies’ contribution to human progress, capitalist dynamism and innovation, while understating their considerable harms.
With the tech bros increasingly supporting the president, Trump 2.0 promises to further enrich rentiers, especially those of their ilk.
His selective Liberation Day tariffs and other policies, especially his new ‘big beautiful bill’, will significantly increase, not reduce, US government debt while deepening American fiscal inequities.
As US tariffs, wars and other distractions preoccupy the world, unwitting MAGA loyalists remain loyal to Trump and his billionaire rentiers’ ‘counter-revolution’.
Jomo Kwame Sundaram is Research Adviser, Khazanah Research Institute, Fellow, Academy of Science, Malaysia, and Emeritus Professor, University of Malaya. Previously, he was UN Assistant Secretary-General for Economic Development, Assistant Director General, Food and Agriculture Organization (FAO), Founder-Chair, International Development Economics Associates (IDEAs) and President, Malaysian Social Science Association.
 TheStar 26 June 2020 |  The Star 20 Sept 2019Political will needed to push for renewable energy |  The Star 10July 2019Malaysian businesses need boost |
|---|---|---|
 The Star 9 Oct 2019Subsidise public transport for bottom 40% |  The Edge 26 Sept 2019Call for measures to counteract global headwinds |  The Edge 9 Oct 2019Subsidise public transportation, not fuel |
 The Star 8 Oct 2019Subsidise public transportation for bottom 70% |  TheEdge 2Oct 2019"We need to counteract downward forces" |
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