🔑 Key Takeaways
- The Jakarta Composite Index (IHSG) saw a sharp correction on Friday, July 24, 2026, reacting to Donald Trump's announcement of new tariffs.
- Trump's protectionist moves are expected to spark global trade uncertainty, impact Indonesian exports, and trigger foreign capital outflows.
- Analysts advise investors to adjust portfolios, focus on defensive sectors, and prepare for short-term market volatility.
JAKARTA – Indonesia's stock market experienced a significant downturn in the Jakarta Composite Index (IHSG) at the close of trading on Friday, July 24, 2026. The plunge in the IHSG followed the announcement of aggressive new tariff policies by Donald Trump, which once again sent ripples through the global geopolitical and economic arena. These policies, perceived as protectionist measures, immediately sparked concerns among investors regarding international trade prospects and economic stability.
Friday's trading session concluded with the IHSG down more than 2%, breaking through a critical psychological level and dragging several blue-chip stocks into negative territory. This negative sentiment was largely driven by fears of the cascading effects of Trump's tariffs on global supply chains and the economic growth of developing nations, including Indonesia.
Impact of Trump's Tariffs on Global and Indonesian Economy
Trump's announcement of new tariffs, specifically targeting various imported products from several key trading partners, has created a wave of uncertainty. While full details are still being evaluated, markets anticipate a potential trade war that could hinder Indonesia's export volumes and squeeze profit margins for companies heavily reliant on international trade.
“Trump's tariff policies, regardless of their political context, consistently create shockwaves in global markets,” stated Dr. Surya Wijaya, a senior economist from Universitas Pembangunan Nasional 'Veteran' Jakarta, in an interview. “For Indonesia, this means a potential decrease in export demand, especially in commodity and manufacturing sectors. Foreign investors tend to pull capital from emerging markets perceived as high-risk when global uncertainty rises.”
The IHSG's decline on Friday is an early indication of the market's reaction to the looming risks. The most affected sectors are expected to be those closely tied to exports and imports, such as manufacturing, mining, and commodity-based industries. Companies with high dependence on the U.S. export market or those using imported components from tariff-targeted countries will feel the direct impact.
Investor Strategy Amidst Volatility
In the face of this dynamic situation, experts advise investors to remain vigilant and review their portfolios. A focus on defensive stocks that are resilient to economic shocks, such as essential goods or infrastructure sectors, might be a prudent strategy.
“This is a time for portfolio diversification and considering assets with stable income and minimal exposure to international trade fluctuations,” suggested Mira Santika, Head of Capital Market Analysis at PT Investama Sekuritas. “Investors should also pay close attention to corporate financial reports and look for those with strong fundamentals, low debt ratios, and the ability to adapt to changing market conditions.”
The Indonesian government and monetary authorities are expected to monitor the situation closely and stand ready to take stabilization measures if needed, though policy maneuverability may be limited given the external nature of this shock. Markets will continue to watch Trump's policy developments and the responses from other nations, which will be critical factors in determining the IHSG's direction in the coming weeks.
Frequently Asked Questions
- What caused the IHSG to plunge on July 24, 2026?
- The IHSG plunged in response to Donald Trump's announcement of new tariff policies, which triggered concerns about global trade wars and economic uncertainty.
- How could Trump's new tariffs impact the Indonesian economy?
- These tariffs could potentially reduce Indonesia's export volumes, pressure the profitability of companies reliant on international trade, and lead to foreign capital outflows due to increased global risk.
- What should investors do in response to this market volatility?
- Investors are advised to review their portfolios, consider diversifying into defensive stocks, and focus on companies with strong fundamentals capable of adapting to trade uncertainties.
