US-China Trade War: Indonesia Sees Opportunity for New Investments

The ongoing trade war between the United States (US) and China, reignited by President Donald Trump, is predicted to bring positive impacts for Indonesia. After securing his second term in office, Trump swiftly imposed a 25% tariff on several imported goods from China.

This policy has led to speculation that many companies will leave China and seek new investment destinations, with Indonesia emerging as a viable option. According to Tjertja Karja Adil, Administrator of the Kendal Special Economic Zone (SEZ), this situation presents a unique advantage for Indonesia.

"We consider this a blessing. Ever since Trump took office again, not just one or two, but multiple foreign investors have visited my office, stating that they are preparing to relocate their factories from China," he said during a media gathering at Menara Batavia, Central Jakarta, on Thursday (Feb 27, 2025).

Investors Start Looking at Indonesia

Tjertja explained that companies choosing to remain in China will face steep tariffs from the US. This has driven several investors to explore relocation plans, with the Kendal SEZ emerging as an attractive alternative.

Echoing this sentiment, Kendal SEZ Executive Director, Juliani Kusumaningrum, noted that the US-China trade war had already begun before Trump’s second term and is expected to persist in the future.

"The trade war was already happening before Trump’s return. Various industries have been affected, with tariffs ranging from 10% to 25%. Moving forward, we predict that the situation will remain largely the same," Juliani explained.

Indonesia as an Investment Relocation Hub

Juliani emphasized that Indonesia must be prepared to seize this opportunity—not only from Chinese investors but also from other countries. One of Indonesia’s key advantages is that products manufactured domestically will not be subjected to Trump’s export tariffs when shipped to the US.

"Besides that, Indonesia has a promising domestic market, with a population of 280 million people. This could be a major attraction for investors planning to relocate," she added.

Currently, the first phase of Kendal SEZ, covering 1,000 hectares, is already 90% occupied. To accommodate more investors, a second phase expansion covering 1,200 hectares is in the pipeline.