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View all search resultsIndonesia should negotiate tariffs for stability, not speed
Other major trading partners like China, Japan, or South Korea, would have grounds to question whether Indonesia is granting discriminatory treatment inconsistent with MFN rules.
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Workers unload fresh fruit bunches (FFB) from a truck on Oct. 29, 2025, in Palangka Raya, Central Kalimantan. (Antara/Auliya Rahman)
W
e should slow down and reassess the United States - Indonesia Agreement on Reciprocal Trade (ART) before locking in. The reason is straightforward.
First, any preferential tariff deal must comply with World Trade Organization rules or risk legal uncertainty. Second, the legal foundation of recent US tariff pressure has weakened after the US Supreme Court limited presidential authority under the International Emergency Economic Powers Act (IEEPA). Third, Indonesia’s economic interests are deeply tied not only to the US but also to China, Japan, South Korea and ASEAN partners.
A deal built on temporary leverage and unclear multilateral footing may create more strategic cost than benefit. Renegotiation is not about confrontation. It is about durability.
The agreement sounds attractive: lower tariffs, expanded market access, closer strategic cooperation. Politically, momentum is powerful. But trade law is not about headlines. It is about enforceable commitments that survive courts, elections and geopolitical shifts.
The central question is not whether cooperation with the US is desirable. Rather, it is whether the current legal and strategic conditions justify locking in long-term concessions now.
Start with the multilateral rulebook. Under the WTO system, members must treat trading partners equally. The most-favored-nation (MFN) principle requires that any tariff advantage granted to one country be extended to all WTO members.
Yet there is an exception: Article 24 of the General Agreement on Tariffs and Trade allows free trade agreements if they cover “substantially all trade” and meet defined conditions. In simple terms, countries can discriminate only if the deal qualifies as a comprehensive free trade agreement.
