A U.S. trade pact with Indonesia reached in July is at risk after Jakarta reportedly backed away from several binding commitments. The agreement would have removed tariffs on more than 99% of U.S. goods while the U.S. would cut threatened tariffs on Indonesian products from 32% to 19%. U.S. officials warn that Indonesia’s attempt to reframe obligations could yield less favorable terms than recent deals with Malaysia and Cambodia; the USTR did not immediately comment.
U.S.-Indonesia Trade Deal at Risk After Jakarta Backtracks, U.S. Officials Warn
08:44 AM, 12/10/2025
A drone view shows stacks of containers at the Tanjung Priok port in Jakarta, Indonesia, July 10, 2025. REUTERS/Ajeng Dinar Ulfiana
WASHINGTON, Dec 9 (Reuters) — A U.S. trade pact struck with Indonesia in July is in danger of collapsing after Jakarta reportedly retreated from several commitments made as part of the agreement, a U.S. official said on Tuesday.
The deal, announced on July 15, would have eliminated tariffs on more than 99% of U.S. goods and removed a range of non-tariff barriers facing American firms. In return, the United States agreed to reduce threatened tariffs on Indonesian products from 32% to 19%.
"They're reneging on what we agreed to in July," the official said on condition of anonymity, declining to identify which specific commitments Indonesia is now contesting.
U.S. negotiators told reporters that Indonesian officials informed U.S. Trade Representative Jamieson Greer they could not accept certain binding obligations and were seeking to reframe some commitments. U.S. officials warned such changes could produce terms less favorable to Washington than recent agreements with Malaysia and Cambodia.
The Financial Times reported that U.S. officials are concerned Indonesia is "backsliding" specifically on pledges to eliminate non-tariff barriers that affect industrial and agricultural exports, as well as on commitments relating to digital trade rules.
No immediate comment was available from the Office of the U.S. Trade Representative. U.S. Treasury Secretary Scott Bessent told a New York Times DealBook event last week that Indonesia "was getting a little recalcitrant" in talks on the pact but did not provide additional detail. By contrast, U.S. negotiations with Malaysia have moved more smoothly, with Kuala Lumpur removing thousands of tariff lines to improve bilateral trade flows.
The dispute highlights the fragility of recent trade diplomacy in Southeast Asia and could affect U.S. exporters in sectors from agriculture to technology if the pact fails to move forward or is renegotiated on less favorable terms.
(Reporting by Andrea Shalal; Editing by Chris Reese)
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