Jakarta. Indonesia has denied US accusations of helping China avoid tariffs, with a senior minister saying that transshipments mainly take place in port-based countries.

The White House recently launched a report titled “The Great Transshipment Scam”. The 24-page document alleged that Chinese exporters had been taking advantage of repackaging and false country-of-origin claims via Indonesia and dozens of other countries to secure lower tariffs. It labeled this linkage as “China’s Shadow Transshipment Network”.

Asked about this report, Chief Economic Minister Airlangga Hartarto said that “Indonesia has never done transshipment”. 

“Because Indonesia is a country that is based on industry, not ports. Some countries specialize in ports,” Airlangga told the press in his office on Thursday, without naming any specific country.

The report classified Indonesia, Malaysia, Thailand, and Vietnam in “Tier 2”. This category groups countries that Washington finds have “significant transshipment volumes combined with deeper integration into China-linked supply chains and input sourcing,” among others. The White House zeroed in on rising activity of China-linked goods — in particular plastic boxes and cases — in the Bekasi-Batam corridor. This allegedly has put pressure on packaging suppliers in Houston, Lake Charles, Beaumont, and Tulsa.   

The Donald Trump 2.0 administration claimed to have lost tens of billions of dollars each year from this practice. It is also now betting on the reciprocal trade deals to curb further transshipments.

Indonesia-US tariff agreement has a clause that binds Jakarta to making rules of origin “necessary” to prevent third countries from enjoying the tariff cuts. Rules of origin determine where the goods have been produced, not where they have been shipped from.

China-Hong Kong investments in Indonesia amounted to $11.5 billion in the first half of 2026. Imports from mainland China were close to $49 billion over the same period. Indonesia also brought in roughly $1.2 billion worth of Hong Kong imports. 

A 10% US tariff is now in effect for Indonesian goods following a forced labor probe.

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