US-China Trade War Presents Investment Opportunities for Indonesia

The ongoing trade war between the United States (US) and China has opened up opportunities for Indonesia to attract foreign investors. US President Donald Trump has imposed import tariffs of up to 25% on various Chinese goods, prompting businesses to consider relocating their factories to other countries.

Tjertja Karja Adil, Administrator of the Kendal Special Economic Zone (KEK Kendal), sees this situation as a strategic advantage for Indonesia.

"This is a blessing for us. As soon as Trump enforced the tariffs, several foreign investors came to my office and expressed their plans to relocate factories from China," Adil said during a media gathering at Menara Batavia, Central Jakarta, on Thursday (Feb 27, 2025).

He noted that companies choosing to remain in China would face high tariffs imposed by the US. As a result, many investors have begun exploring the possibility of relocating their operations to KEK Kendal.

Trade War Likely to Persist, Indonesia Must Seize the Moment

Meanwhile, Juliani Kusumaningrum, Executive Director of KEK Kendal, emphasized that the trade war between the US and China had already begun before Trump took office. She predicted that the situation would likely continue in the coming years.

"This trade war was already in motion before Trump assumed office. Various industries have been affected by tariffs ranging from 10% to 25%. Moving forward, we expect the situation to remain largely the same," Juliani stated.

She urged Indonesia to proactively seize investment opportunities not only from China but also from other countries. Indonesia offers a unique advantage, as its locally manufactured goods are not subject to Trump's export tariffs.

"In addition to that, Indonesia benefits from not being subjected to additional tariffs when exporting goods to the US," she added.

Moreover, Indonesia presents an attractive market with a population of 280 million people. Juliani hopes that investors will recognize this potential when making relocation decisions.

Currently, the first phase of KEK Kendal, covering 1,000 hectares, is already 90% occupied. Plans are underway to expand into a second phase, adding 1,200 hectares to accommodate new investors looking to establish operations in Indonesia.