The country is one of the few where smartphone makers have not been able to penetrate, and Indonesia has insisted that companies make 40 percent of their phones locally.
This of course destroys the US model of making cheap phones in China and having them shipped to foreign parts.
From January 1, 2017, smartphone makers that sell smartphones and tablets in the fast-growing economy of 250 million people to produce 40 percent of their content locally.
We are not sure why the US Trade Representative (USTR), is involved in strong arming Indonesia to have a change of heart. If he wins, it is not as if he is protecting US jobs. He is in fact protecting Chinese jobs and the bottom lines of big multinationals who do not pay much tax in the US.
Apparently critics of the “made in Indonesia” rule, including an influential US business group, say it could increase costs and restrict access to technology.
“The United States shares these concerns, and strongly supports ensuring that information and communications technology, which can be instrumental to economic development, be openly available in Indonesia,” said a USTR spokesman in Washington.
Less than a third of Indonesians own a smartphone, a much lower rate than China’s almost 80 percent, according to figures from research firm Canalys.
Samsung has already begun producing phones in Indonesia after opening a factory near Jakarta last year, but Apple’s supplier Foxconn has been dragging its feet as it negotiates with the Indonesian government over a proposed investment that would include manufacturing smartphones.