JakartaGlobe-Feb 27, 2026
Indonesia’s Agreement on Reciprocal Tariff (ART) with the United States is increasingly seen by economists as a structural policy gamble rather than a straightforward export breakthrough. The deal removes US tariffs on 1,819 Indonesian products. In exchange, Indonesia is expected to open nearly 99% of its tariff lines to US goods at 0%, creating what analysts describe as an asymmetrical arrangement. A February 2026 report by the Institute for Economic and Social Research at the University of Indonesia (LPEM UI) argues that the risks could outweigh the benefits. While tariff elimination grabs headlines, the report identifies non-tariff commitments as more consequential. These include harmonizing standards with US sanitary and technical benchmarks, recognizing US certifications, easing import licensing, limiting local content requirements, and committing to purchasing US energy and agricultural products. Such provisions could narrow Indonesia’s industrial policy space, weaken down-streaming strategies, increase imports, trigger trade diversion, and deepen dependence on a single partner. Sovereignty concerns have intensified scrutiny. One clause requires Indonesia to adopt “equivalent restrictive measures” if Washington imposes economic restrictions on a third country. Read more at: https://jakartaglobe.id/business/beyond-tariffs-indonesias-uneven-pact-with-washington#goog_rewarded
