US President Donald Trump and Indonesian President Prabowo Subianto are set to sign a trade agreement at the end of January 2026. - Photo: Reuters
JAKARTA: Indonesia has denied that a tariff agreement with the United States, expected to be signed at the end of January 2026, will compromise the South-east Asian nation’s policymaking sovereignty, since it is limited solely to trade matters.
Speaking from Washington D.C., its Coordinating Minister for Economic Affairs Airlangga Hartarto said that Jakarta expects the deal to be signed by President Prabowo Subianto and his US counterpart Donald Trump in the US.
He made the statement after meeting the US Trade Representative Jamieson Greer on Monday (Dec 22) local time.
“Other than trade matters, we didn’t touch any other matters because this would be purely an agreement on reciprocal trade,” Airlangga said in a reply to a reporter’s question during the online media briefing.
He stressed that Indonesia is sticking to its pledges to remove non-tariff barriers and various deregulations for fairer trade as conditions to the agreement. However, he did not elaborate further.
Indonesia has in July committed to a series of strategic measures to balance trade with Washington. These included removing non-tariff barriers such as a requirement to have locally made parts in foreign products, such as Apple’s iPhones.
Indonesia in 2024 ran a US$18 billion (S$23 billion) trade surplus with the US. The US has imposed a 32 per cent tariff on Indonesian goods, but its implementation has been paused until July to make room for negotiations.
Malaysia and Cambodia in October 2025 separately signed their respective Agreement on Reciprocal Trade (ART) with the US. These agreements included controversial “security clauses” which critics argued effectively subcontracts the nations’ foreign policy to Washington.
The clauses authorises the US to unilaterally terminate the deal and reimpose high tariffs if Malaysia or Cambodia makes a new trade deal with a third country that jeopardises vital US interests.
It also means that if the US imposes a restriction on a third country for national security reasons, Malaysia and Cambodia must adopt a measure with an equivalent restrictive effect.
“The meeting went well,” Airlangga told reporters after his meeting with Ambassador Greer, adding that Indonesia presented issues of importance to Indonesia, just as the US presented issues of primary importance to the US.
“The emphasis was placed on safeguarding the mutual interest of both nations,” he said.
South-east Asia’s largest economy and the US are ironing out details on a deal reached in July 2025, under which Indonesia’s exports to the US would face a tariff rate of 19 per cent instead of 32 per cent.
In return for the reduction in the tariff rate, Indonesia, among other things, pledged to import US$15 billion worth of energy products and US$4.5 billion worth of agricultural commodities from the US.
More than half of Indonesia’s fuel imports are currently from Singapore, which refines crude oil from the Middle East, Australia and Malaysia.
In 2024, Indonesia imported petroleum worth US$11.4 billion, or 53 per cent of its total petroleum imports, from Singapore, while only US$19 million worth of the commodity came from the US, or less than 0.1 per cent of the total petroleum imports, according to government data.
Most of the remaining fuel imports were from Malaysia (valued at US$4.5 billion), China (US$1 billion) and Saudi Arabia (US$825 million).
“The technical teams from both nations in the second week of January will continue to meet for ‘a legal scrubbing’… which we target to complete in one week,” Airlangga said, specifying that the targeted complete date tentatively is between Jan 12 and 19, 2026.
Legal scrubbing, or legal review, is the final clean-up of an agreement text after political negotiations have finished and before the document is officially signed. During the legal review process, the substance of the agreement can no longer be changed.
“After all technical processes are complete, it is expected that by end-January we can prepare documents for official signing by President Prabowo and President Donald Trump. The US is making preparation to arrange for a meeting between both leaders,” Airlangga added. - The Straits Times/ANN
