Indonesia faces pressure from the US regarding the trade agreement (tariff 19%) reached in July, with the US demanding new clauses that may restrict Indonesia's cooperation with China, its largest source of foreign investment, causing friction between the two sides.
According to Bloomberg, the US accuses Indonesia of breaking initial commitments. New demands include: if Indonesia signs agreements detrimental to US interests, the US can cancel the existing deal; critical mineral development (with China dominating the supply chain) and oil & gas investment cooperation must exclude third parties (affecting Indonesia's relations with Russia and China).
Insiders say the US is pressuring Indonesia to distance itself from China during negotiations. The US Trade Representative's Office emphasizes that in October, the US, Malaysia, and Cambodia signed an agreement at the ASEAN meeting, hoping Indonesia will follow suit. A spokesperson for Indonesia's Coordinating Ministry for Economic Affairs responded that there are no specific disputes in the negotiations and that the dynamics are normal, with the government still optimistic about reaching a "mutually beneficial agreement".
In the initial agreement, Indonesia agreed to purchase US$19 billion worth of US products (including 50 Boeing aircraft) and eliminate import tariffs. However, relations with China remain a key issue. Since 2020, China has invested over US$15 billion in Indonesia's metals and processing sector. Indonesia's Minister of Economic Affairs will hold an online meeting with the US Trade Representative to discuss the matter.
Indonesia faces pressure from the US regarding the trade agreement (tariff 19%) reached in July, with the US demanding new clauses that may restrict Indonesia's cooperation with China, its largest source of foreign investment, causing friction between the two sides.
According to Bloomberg, the US accuses Indonesia of breaking initial commitments. New demands include: if Indonesia signs agreements detrimental to US interests, the US can cancel the existing deal; critical mineral development (with China dominating the supply chain) and oil & gas investment cooperation must exclude third parties (affecting Indonesia's relations with Russia and China).
Insiders say the US is pressuring Indonesia to distance itself from China during negotiations. The US Trade Representative's Office emphasizes that in October, the US, Malaysia, and Cambodia signed an agreement at the ASEAN meeting, hoping Indonesia will follow suit. A spokesperson for Indonesia's Coordinating Ministry for Economic Affairs responded that there are no specific disputes in the negotiations and that the dynamics are normal, with the government still optimistic about reaching a "mutually beneficial agreement".
In the initial agreement, Indonesia agreed to purchase US$19 billion worth of US products (including 50 Boeing aircraft) and eliminate import tariffs. However, relations with China remain a key issue. Since 2020, China has invested over US$15 billion in Indonesia's metals and processing sector. Indonesia's Minister of Economic Affairs will hold an online meeting with the US Trade Representative to discuss the matter.