Written by The Banking Post
A major trade deal between the United States and Indonesia is now at risk, with Washington accusing Jakarta of reversing several commitments agreed in July.
A US official, speaking anonymously, said Indonesia is “reneging on what we agreed to in July,” without specifying which commitments were being questioned.
Jakarta, however, insists the negotiations are progressing as planned. An Indonesian government official said the tariff talks are moving forward under the framework set by leaders on both sides, adding that some “harmonisation of language” is still required.
Under the July understanding, Indonesia agreed to eliminate tariffs on more than 99% of US goods and remove all non-tariff barriers affecting American firms. In return, the US would cut its threatened tariffs on Indonesian products to 19% from 32%.
The agreement was initially hailed by US President Donald Trump as “a huge win for our automakers, tech companies, workers, farmers, ranchers, and manufacturers.”
But US officials now say Jakarta is pushing to soften or reframe binding commitments, raising concerns that the revised deal could be weaker than recent US agreements with Malaysia and Cambodia. They also believe Indonesia is “backsliding” on pledges to scrap non-tariff barriers and address digital trade issues.
No comment was available from the Office of the US Trade Representative.
Last week, US Treasury Secretary Scott Bessent said Indonesia “was getting a little recalcitrant” on the deal, while noting that Malaysia had dropped thousands of tariffs, allowing trade to flow more smoothly.
