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Govt pitches RI for factories relocating from China to evade US tariffs

Deputy Industry Minister Faisol Riza said Trump’s tariff policies were likely to push Chinese businesses to shift operations to Southeast Asia to maintain access to the United States market.

Ruth Dea Juwita (The Jakarta Post)
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Jakarta
Tue, January 21, 2025

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Govt pitches RI for factories relocating from China to evade US tariffs Proper planning: Deputy Industry Minister Faisol Riza (left) looks at a mock-up of an industrial manufacturing complex in this undated picture. (Courtesy of/Industry Ministry)

T

he government has reiterated its openness to investment from Chinese factories looking to evade United States tariffs, which many expect could rise under newly inaugurated US President Donald Trump.

Jakarta’s hopes rest particularly on Batam Island’s Special Economic Zone (SEZ) emerging as a prime destination.

Deputy Industry Minister Faisol Riza said Trump’s likely tariff measures could push Chinese businesses to shift operations to Southeast Asia to maintain access to the US market.

“For many, exporting directly from China to the US will no longer be viable. They’re exploring ASEAN countries, including Indonesia, as alternative production hubs,” Faisol was quoted as saying in a statement released on Sunday.

Read also: Jakarta still pursuing FTA with US under Trump

The government has been pushing the Batam Island SEZ, leveraging its free-trade zone status, which exempts companies from key taxes and import duties, as a strategically positioned hub to attract investment in industries that are particularly vulnerable to US tariffs, such as electronics, textiles and footwear and the automotive industry.

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“This is a golden opportunity to strengthen Indonesia’s manufacturing sector and put more ‘Made in Indonesia’ labels on global products,” Faisol said.

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