Trump Slaps 19% Tariff On Indonesian Imports, Threatening Chinese Solar Firms’ “Made in Indonesia” Strategy

On July 15, U.S. President Donald Trump announced via the social media platform "Real Social" that the United States will impose a 19% tariff on all imported goods from Indonesia. At the same time, U.S. exports to Indonesia will benefit from tariff-free access and exemption from non-tariff barriers.

Trump stated that the decision follows a significant agreement reached with Indonesian President Prabowo during recent discussions. Under this landmark deal, Indonesia has, for the first time, fully opened its domestic market to the United States. As part of the agreement, Indonesia has pledged to purchase $15 billion worth of U.S. energy products, $4.5 billion in American agricultural goods, and 50 Boeing aircraft.

Over the past week, Trump has issued tariff letters to several U.S. trading partners, pressuring them to reach bilateral trade deals before new, higher tariffs take effect on August 1. Indonesia had previously faced the threat of a steep 32% tariff but has now become the first country to successfully negotiate a reduced rate following such a notice. Nonetheless, the newly imposed 19% tariff still presents a substantial barrier for Indonesian photovoltaic (PV) products entering the U.S. market.

The move also comes amid an intensifying U.S. trade crackdown on Southeast Asian PV exports. Back in April, Washington imposed hefty tariffs on solar products from four key countries-Malaysia, Thailand, Vietnam, and Cambodia-which had become vital transit hubs for Chinese PV manufacturers seeking to bypass existing U.S. and European trade barriers. With these buffer zones rapidly eroding, export pathways for Chinese solar companies are shrinking.

Indonesia, however, had previously been exempt from the U.S. Section 201 safeguard tariffs, giving it a competitive edge with relatively lower total tariff exposure. That advantage led many Chinese photovoltaic companies to fast-track investment in Indonesia as a new overseas manufacturing base.

For instance, on May 19, Chinese solar firm Haitai New Energy announced plans to accelerate the development of its Indonesia-based operations by launching a new project for 2GW of photovoltaic cell production and 1GW of module capacity. The initiative involves a capital injection of 146 million yuan into its local subsidiary, PT GREEN VISION SOLAR.

In June, a joint venture between Trina Solar, Indonesia's state-owned utility PLN, and Jinguang Group completed construction of a PV manufacturing plant in Central Java. This facility, which adopts high-efficiency TOPCon cell technology, has an annual capacity of 1GW and is the first in Indonesia to integrate cell and module production.

Also in June, LONGi Green Energy announced a strategic collaboration with Pertamina NRE-Indonesia's national energy company subsidiary-to establish a high-efficiency photovoltaic module production base in the Deltamas Industrial Zone, West Java. The facility, which will use LONGi's proprietary HPBC (Hybrid Passivated Back Contact) cell technology, is expected to reach a production capacity of 1.6GW and begin trial production by June 2025.

These investments reflect a core strategy: leveraging Indonesia's origin status to circumvent Western trade restrictions. However, the newly imposed 19% tariff on Indonesian goods could raise the cost of exporting solar products from Chinese companies via Indonesia to the U.S. market. Unless Washington later removes photovoltaic products from the tariff list, companies may be forced to reassess the economic viability of their "Made in Indonesia" strategy or consider reconfiguring their overseas production plans.