Impact of Trump Policy, Chinese Investment Flows to RI

Jakarta – Deputy Minister of Industry Faisol Riza revealed that a number of Chinese companies came to the Ministry of Industry with the aim of moving their industrial operations to the Southeast Asian region, including Indonesia.

The move is thought to be related to the re-election of Donald Trump as President of the United States (US), who plans to impose high import tariffs on a number of countries, including China.

“We suspect that they think it is better to move their industries to countries in the Southeast Asian region so that if they export directly to America, they will not lose money like exporting directly to China,” Faisol said at the 100 Indonesian Economists Workshop, Tuesday, December 3, 2024.

Read also: Trump’s Return to the White House is a Threat to China

According to Faisol, this potential trade war is both an opportunity and a challenge for Indonesia. On the one hand, this opens up great investment opportunities, but on the other hand, Indonesia must be ready to absorb these investments by improving regulations quickly.

“Because we must improve regulations as quickly as possible in order to see or anticipate this global economy,” he explained.

Previously, Donald Trump’s return to the White House was expected to trigger global economic turmoil. During his campaign, Trump promised import tariffs of 10 percent for all goods entering the US and 60 percent for products from China.

Read also: US-China Tensions Rising, Bankers Asked to Do This

Chinese Foreign Ministry Spokesperson Mao Ning stated that a trade war would only harm all parties.

“We don’t answer hypothetical questions. But let me reiterate that there are no winners in a trade war, and the world will not benefit from it either,” he said, quoted by VOA Indonesia, Tuesday, November 26, 2024.

He also added that high tariffs from the US could hurt countries that depend on exports. However, on the other hand, other countries in Southeast Asia could potentially benefit from Chinese companies shifting production to avoid the tariffs. (*)

Editor: Yulian Saputra