How Trump and Apple could ignite Indonesia’s industrial growth

Donald Trump’s reelection as president of the US and Indonesia’s ban on iPhone 16 sales are two events that may appear unrelated to one another. Together, however, they signal that Indonesia may be entering a period of unique opportunity for its domestic industries.

Trump’s push for trade protectionism, combined with the Indonesian government’s efforts to ensure global corporations provide value to the local economy, could position the country as an alternative to China and catalyze domestic industrial development.

Donald Trump on the campaign trail in 2024 / Photo credit: Jonah Elkowitz / Shutterstock

Guess who’s back

The broader global trade environment is evolving. With Trump set to return to the White House, there’s a strong chance he will intensify protectionist measures, especially against China.

During his previous term, Trump imposed tariffs on hundreds of billions of dollars worth of Chinese goods. He has promised to strengthen these policies, potentially creating new barriers to trade with China.

See also: Shein and Temu in crosshairs of Trump’s tariffs

Companies concerned about tariffs or the risk of further restrictions on Chinese imports may start looking for alternative manufacturing bases, and Southeast Asia appears an attractive candidate. Indonesia, in particular, is well-positioned to absorb some of this shifted demand, thanks to its large and relatively young workforce, rich natural resources, and improving infrastructure.

Beyond attracting investment, this shift could stimulate further innovation in Indonesian industries. As more companies invest in the country, it could see a spillover of tech, skills, and management practices that contribute to productivity gains across sectors.

Local firms would have the opportunity to observe and adopt best practices from international corporations, which would help them become more competitive. This would be a big step toward integrating the country into the global value chain.

A potential influx of foreign investment could also spark improvements in Indonesia’s infrastructure. This can help address one of the challenges that come with attracting global businesses: ensuring that transportation, communication, and energy systems are up to international standards.

Jakarta’s busy traffic / Photo credit: Shutterstock

The growth of domestic industries also aligns with the country’s aspirations to become an economic powerhouse in the region. As Indonesian companies become more competitive globally, they’ll likely be able to expand their reach and increase exports.

This could significantly contribute to the country’s gross domestic product and lead to more jobs, higher incomes, and an overall improvement in living standards. If managed effectively, manufacturing and tech industries in Indonesia could help reduce its reliance on natural resources and foster a more diversified and resilient economic base.

Not the apple of Indonesia’s eye

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