NEGATIVE EFFECT FROM USA-CHINA TRADE WAR

                   The Challenge of the Competition of the Trade War Between Countries

       In his 2018 book "Identity", Francis Fukuyama states that His motivation for writing the

book was, among others, the election of Trump and Mr Brexit referendum results. Trump represents

 a broader trend in international politics, towards what has been called populist nationalism. 

Populist leaders seek to use the legitimacy afforded by democratic elections to consolidate 

power. They claim a direct charismatic relationship with "people," which is often defined in 

narrow ethnic terms that exclude most of the population. They do not like institutions and seek 

to undermines the “checks and balances” that limit the leader's personal power in modern 

liberal democracy: courts, legislatures, independent media and bureaucracy nonpartisan. 

Other contemporary leaders who can fall into this category are Vladimir Putin from Russia, 

Recep Tayyip Erdoğan from Turkey, Viktor Orbán from Iqbal Zulkarnain, Arthur Josias Simon 

Runturambi Hungary, Jaroslaw Kaczynski from Poland, and Rodrigo Duterte from the Philippines. 

Condition the same thing has happened in Indonesia recently and can threaten security because

 there is a gap between rulers who use populist strategies, pseudo-image, and prioritizing 

practical political goals on the one hand, and society who want changes in the quality of state 

administrators and state management better on the other hand. If this condition is allowed to 

continue, it will be a crisis the current pandemic and economy that is happening will turn into

 a political crisis and social crises that can have a major impact on the course of the nation 

and state forward.

        Because when many other nations are biased, they focus more on achieving progress 

technology which is a demand that must be achieved in the current era, our country is still

busy with basic political and social matters that have not been resolved, such as the ongoing 

public discourse about the form of the state, the issue of separatism, and parties politics

with outdated ideas.

        In the context of Samuel P. Huntington's thinking, Indonesia also has

tough challenges, for example in the context of geopolitical and geo-economic developments 

recent times where there is intense competition between the United States and China in 

the race for world hegemony. Indonesia must be able to play beautifully with carry out

 a “hedging strategy” in managing relationships in all aspects with the two superpowers, 

and also maintain good relations and proportional to other powers such as Russia, Europe, 

Japan, and other powers other areas. And I think the direct impact of the geopolitical

 competition economic impact is more dominant than ideological impact. The rivalry of two 

forces and its influence on local political and economic actors is very influential,

 because these two forces will definitely stick and strengthen their influence in Indonesia,

 either directly through bilateral policies, or indirectly directly through the influence of 

trade and political strategies. So if it's a theory “remaking new world order” happens and

 whatever form it takes, Indonesia strategically prepared, positioned appropriately and 

able to manage it appropriately target.

Never since the Mao Zedong era has China attempted to export a revolution or overthrow a 

democracy. China is trying make the world safe for the autocratic system and secure the 

Communist Party system China (CCP) in the country. Of course, China has offered an

 alternative to model institutions of states led by the United States and have attempted 

to combat universal values ​​and make it easier for other authoritarian regimes to thrive 

and survive. Seeing competition with China only in terms of ideological clashes will make us 

lose the real source of influence China is an economic power and a technological power that 

growing rapidly. Over the years, Asian countries, including Indonesia, have benefited from 

an open and online trading system based on clear rules.

        The Role of the Ministry of Defense in Responding to Indonesia's Strategy Between 

War Trade Between America and China Disruptions and shocks created by America's trade 

disputes The United States and China have shaken confidence in the trading system  global.

Many doubt the trade war will be a solution to trade imbalances, and instead believe that

 tensions between The United States and China will eventually weaken the economies of both

 countries and the damage will spread. In the face of the challenges posed China, the best 

approach for democratic countries including Indonesia is maintain and ensure the democratic 

system runs well in the country, and strengthen bilateral and multilateral cooperation in

 making agreements trading. Indonesia has a strategic position in the midst of the American 

trade war United States and China and can play a role that can take advantage and without 

the need to lean towards one side, because both are strategic partners. In carrying out this 

role, what is called a hedging strategy is needed hedging and risk mitigation strategies.

        In the world of finance, hedging is a risk management strategy used

to offset losses in investment by taking the opposite position in related assets. 

The risk reduction afforded by hedging is also usually result in reduced profit potential.

 Taken from the theory and application that popular in the financial world, the basic 

assumption is that in hedging strategy means a country diversifies its risks by taking two

opposing policies from one country to another. A hedging strategy determined not only by 

the actions of a country, but by its intentions. Among the concepts existing, hedging strategy 

or hedging has attracted policy and attention of the literature because this concept appears to 

effectively explain behavior secondary power. Generally, hedging refers to a protection policy

 against opportunism. The term hedging strategy is widely used in the literature academia and 

policy. However, usage has created confusion conceptual because their meanings are very 

different. Too often, practitioners and researchers policy equates the term with "balance," 

considering it as antonym of "engagement," which refers to the effort to create a relationship 

cooperation through political, military, economic, or social means. In relationship

 internationally, the state carries out two contradictory policy directions together:

 balance and engagement. A country prepares for the worst by balancing – maintain a strong

 military, build and strengthen alliances - all the while prepare the best and attract – build

 trading networks, enhance diplomatic relations, and create a multilateral framework that tie. 

The United States' behavior towards China is easily seen with implement these two extreme

 policies.

        The 2019 Institute for Development of Economic and Finance (Indef) Mid-Year Review Book stated that the heated trade war between the two economic giants, the United States (US) and China, had an impact on the export performance of several countries. Indonesia is one of the countries negatively affected by the trade war on exports, which is estimated to be minus 0.24% until the end of 2019.

 

Apart from Indonesia, exports from European countries are predicted to go down by 0.32, Japan by 0.92%, Oceania by 0.62%, India by 0.08% and Africa by 0.01%. On the other hand, the trade war will not have much impact on several countries, such as Vietnam, which is predicted to record positive export growth of 2.58%. In addition, other countries that recorded a positive impact of the trade war in terms of exports were Malaysia, which rose by 0.39%, Singapore by 0.53%, and Thailand by 0.23%.