A US official says Indonesia is reneging on July trade deal commitments, risking collapse of the pact that promised major tariff cuts.
WASHINGTON: A United States trade agreement finalised with Indonesia in July is now at risk of collapse.
A US official stated on Tuesday that Jakarta has backtracked on several commitments made as part of the deal.
“They’re reneging on what we agreed to in July,” said the official, who spoke on condition of anonymity.
The official did not provide details on which specific commitments Indonesia was now questioning.
An Indonesian government source offered a different perspective on Wednesday.
The source, also speaking anonymously, said tariff negotiations are proceeding on the track agreed by leaders.
The Indonesian source added that harmonisation of language was required for the agreement.
The July deal saw Indonesia agree to eliminate tariffs on over 99% of US goods.
It also included a pledge to scrap all non-tariff barriers facing American firms.
In return, the US agreed to drop threatened tariffs on Indonesian products to 19% from 32%.
US President Donald Trump initially hailed the pact as a huge win for American industries.
Indonesian officials have since told US Trade Representative Jamieson Greer they cannot agree to some binding commitments.
Jakarta reportedly wants to reframe certain parts of the agreement.
US officials believe this would lead to worse terms than recent deals with Malaysia and Cambodia.
They allege Indonesia is “backsliding” on eliminating non-tariff barriers for US exports.
Commitments on digital trade issues are also reportedly in question.
US Treasury Secretary Scott Bessent recently noted Indonesia was “getting a little recalcitrant.”
He contrasted this with Malaysia, which he said had proven to be a good actor.
Bessent said Malaysia dropped thousands of line tariffs, improving trade flow with the US.
No immediate comment was available from the US Trade Representative’s office. – Reuters
