Jakarta. A senior government official said Friday that American tech giant Apple would remain committed to investing in Indonesia through its Chinese vendor despite the freshly announced trade agreement with the US.

US President Donald Trump recently revealed that Indonesia would open up its entire market for American goods. Southeast Asia’s largest economy has agreed to eliminate non-tariff barriers, on top of granting 0 percent duty on US goods, according to Trump, although both governments have yet to disclose the full details.

Early this year, the government unveiled Apple’s plans to invest in a factory aimed at enabling its coveted iPhone 16 to enter the Indonesian market by meeting Jakarta’s local content demand. The government said at the time Apple would set up a factory for its tracking device AirTag in Riau Islands’ biggest city, Batam. However, the tariff deal with Trump sparked questions on the fate of American investments in the country, including those of Apple.

Riyatno, a deputy at the Investment Ministry, told the press that he doubted that Apple would withdraw its investment following the trade deal.

“We are optimistic about [Apple’s] planned investments, especially since the company has purchased [land] in Batam. I think they will stick to the plan of investing here,” Riyatno said in Jakarta.

Riyatno did not make further comments on the factory’s progress so far.

The investment plan will take place via the company’s vendor, Luxshare-ICT, a Shenzhen-based electronic components manufacturer.  Apple works with a vast network of vendors worldwide to manufacture its products. 

BP Batam, the city’s development agency, announced in May that Luxshare-ICT had already broken ground on the plant and was set to begin production by December.

There are some discrepancies in the AirTag factory investment value. Initial reports showed that it was worth $1 billion. However, the Industry Ministry's spokesman, Febri Hendri Antoni Arif, stated back in late January that the investment value actually “only” reached $200 million. In addition to the accessory plant, Apple has also committed itself to building research and development facilities valued at $160 million in the country.

Trump’s trade team had launched a report that slammed Indonesia’s local content requirement on communication technologies around the time of the tariff announcement. In that report, the US Trade Representative’s office wrote that 4G-LTE-enabled devices must contain 35 percent locally made parts before they can enter the Indonesian market. Washington admitted to having been pressing Jakarta to remove these barriers.

Trump had triggered global economic uncertainties by launching unilateral tariffs on countries that he deemed as unfair trading partners. A 10 percent baseline tariff had already been in place on all foreign goods entering the US since April, but some countries would face steep hikes in rates soon.

Just last week, Trump sent a fresh threat letter, informing President Prabowo Subianto that he would slap 32 percent tariffs on Indonesian goods unless Jakarta clinched a trade deal by August 1. Prabowo managed to strike a deal weeks before the deadline. Indonesia ends up with a 19 percent tariff on its US-bound goods, while also making some compromises in trade.

“Indonesia will pay the US a 19 percent tariff on all goods they export to us, while US exports to Indonesia are to be tariff and non-tariff barrier-free,” Trump said on Tuesday local time. 

Jakarta agreed to buy $15 billion worth of US energy, another $4.5 billion American farm product imports, and some 50 Boeing jets. Trump had also told White House reporters that the deal would enable the US to get its hands on Indonesian copper—a metal key in electrical vehicles and advanced electronics. Riyatno refused to comment on Trump’s interest in Indonesian copper.

The Indonesian government reported that the US was Indonesia’s sixth-largest source of foreign direct investment in Q1-2025. The US had invested $802.2 million over the said period, with the money going to 2,652 projects. However, these figures are only less than half of what China had invested. China had put around $1.8 billion in Indonesia between January and March, just behind Hong Kong at $2.2 billion.

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