Indonesia Attracts Global Industry, Trump Tariffs Become Investment Magnet
JAKARTA – The US reciprocal tariff of 19%, or Trump Tariffs, is expected to encourage foreign investors, particularly from China and Taiwan, to relocate their factories to Indonesia starting in early 2025.
Industrial zones like Jababeka are the main destinations due to relatively low tariffs, available supply chains, and a potential domestic market.
Investment interest is rising as Indonesia is seen as more competitive than neighboring countries like Vietnam and Taiwan, which face a 20% tariff.
The China+1 strategy is also driving Chinese companies to seek new production bases overseas to avoid high tariffs in the US and Europe, while leveraging Indonesia’s market appeal.
Yohanes P. Widjaja, Chairman of the Indonesian Electrical Equipment Manufacturers Association (APPI), acknowledged the interest of foreign investors, including those from Taiwan, in establishing manufacturing facilities in Indonesia.
“The 19% tariff imposed on Indonesia is considered lighter compared to Vietnam and Taiwan, which reach 20%,” Yohanes stated recently.
In line with this, Setyono Djuandi Darmono, President Director of PT Jababeka Tbk. (KIJA), revealed a significant increase in interest from Chinese companies since early 2025. This trend is part of the China+1 strategy, where Chinese investors are seeking new production bases overseas.
“The sectors under scrutiny include energy, electric vehicle (EV) ecosystems, electronics, and logistics,” Darmono said on Tuesday (August 19).
