Jakarta. US President Donald Trump defended his global tariff assault in Davos on Wednesday, saying that the controversial trade policy — which hit Indonesia — was fair and necessary to shrink Washington’s deficit.

While Trump’s speech at the annual World Economic Forum (WEF) reflected his obsession with Greenland, the businessman-turned-politician did not forget to talk about the tariff bazooka that repeatedly took over the global news cycle. 

In less than 3 months of being back in the White House, Trump already launched reciprocal tariffs across Washington’s trading partners, including Indonesia. For Southeast Asia’s biggest economy, the US tariffs started with a baseline rate at 10% and were supposed to rise to 32%. The Trump administration later agreed to drop them to 19% following months-long negotiations. 

“Instead of raising taxes on domestic producers, we are lowering them and raising tariffs on foreign nations to pay for the damage that they have caused,” Trump said in his highly anticipated speech.

The 79-year-old politician went on to say how the tariffs had “radically reduced” Washington’s ballooning trade deficit, which he said was the largest in world history. 

“We were losing more than $1 trillion every single year, and it was just wasted. It was going to waste. But in one year, I slashed our monthly trade deficit by a staggering 77%. And all of this, with no inflation,” Trump told the forum.

He claimed that the US had been keeping the whole world afloat, and so, it should pay the "lowest interest rate" of any country. According to Trump, the US has been "fair" when imposing tariffs on foreign goods. 

"Let's put different tariffs, different places. You are all parties to them. [In] some cases, victims of them. But in the end, it's a fair thing. And most of you realize that." 

President Prabowo Subianto is set to stand on the Davos stage on Thursday afternoon local time. He flew from London following talks with British Prime Minister Keir Starmer. 

Prabowo has appointed Chief Economic Minister Airlangga Hartarto to helm the US tariff negotiations, which recently saw Indonesian palm oil getting import tax exemptions. The chief negotiator has said that Prabowo is set to sign the reciprocal trade agreement by the end of January. 

Airlangga’s aide, Haryo Limanseto, signaled that signing would not take place in Davos despite both leaders showing up to the annual forum. Haryo told the Jakarta Globe on Monday that they would have to wait for the ongoing legal drafting process to finish — hopefully within this month. In a nutshell, this is the part where both sides make sure the text is legally sound and clear. The signing also ultimately boils down to “the leaders’ schedule”.

Official statistics showed that Indonesia-US trade totaled $39.7 billion between January and November 2025. Trade relations were heavily tilted in Indonesia’s favor as Jakarta recorded a $16.5 billion surplus over the said period. However, the tariff-hit Indonesia managed to record a 27.5% year-on-year growth in its positive trade balance with what Trump called “the hottest country anywhere in the world”.