US-China trade war is good for Indonesia: Indonesian V-P

Indonesian Vice-President Jusuf Kalla's comments are in contrast to those from other Indonesian officials, who have warned of the negative spillover effects from higher US tariffs on China.
Indonesian Vice-President Jusuf Kalla's comments are in contrast to those from other Indonesian officials, who have warned of the negative spillover effects from higher US tariffs on China.PHOTO: AFP

JAKARTA (BLOOMBERG) - The US-China trade war is beneficial to Indonesia as it could lead to a shift in production to other countries in the region, according to Indonesian Vice-President Jusuf Kalla.

"Ongoing trade war is quite good," Mr Kalla said at a discussion on economic outlook in Jakarta on Tuesday (Jan 8).

His comments are in contrast to those from other Indonesian officials, who have warned of the negative spillover effects from higher US tariffs on China, including the possibility of China dumping cheap products, like steel, in neighbouring markets.

South-east Asia is seen as a potential beneficiary from the trade war, especially low-cost locations like Vietnam. Indonesia, with its restrictions on foreign investment and poor infrastructure, is less of a draw for businesses.

Indonesia's trade deficit ballooned to a five-year high of US$2.1 billion (S$2.85 billion) in November as imports continued to outpace exports.

There are signs that the United States and China may reach a deal to resolve the trade dispute that has resulted in the two countries imposing tariffs on a combined US$360 billion in each other's imports.