Indonesia may revisit US trade pledges after landmark ruling

JAKARTA, Indonesia (MNTV) – A landmark ruling by the U.S. Supreme Court striking down President Donald Trump’s global tariff policy is being viewed in Indonesia as an opportunity to rethink its trade strategy and reassess commitments made under pressure from Washington, reports Jakarta Globe.

The court ruled 6-3 that Trump lacked the authority to impose sweeping global tariffs under the International Emergency Economic Powers Act (IEEPA), dealing a blow to one of the core pillars of his “America First” agenda. 

The decision invalidated so-called reciprocal tariffs that had threatened higher duties on imports from dozens of U.S. trading partners, including Indonesia.

Trump criticized the Supreme Court’s decision, calling it “very disappointing” and accusing the justices of being influenced by foreign interests, without providing evidence. He insisted the ruling would not stop him from reshaping global trade rules.

On Friday, ahead of the Supreme Court ruling, Indonesia had just announced a trade deal with the U.S. Under the agreement, the U.S. committed to maintaining a 19% tariff on most Indonesian goods, down from the initially threatened 32%. 

Washington also agreed to grant tariff exemptions on 1,819 Indonesian tariff lines, including palm oil, electronic components, and spices. 

Textiles will be subject to a tariff-rate quota system, under which a predetermined volume of eligible exports can enter the U.S. market at a zero tariff. Indonesia, in turn, eliminated tariffs on 99% of U.S. products, covering a wide range of goods from agricultural commodities to automobiles.

For Jakarta, the ruling has immediate implications. Economists say it removes the pressure for Indonesia to proceed with ratifying the Agreement on Reciprocal Trade (ART), a deal negotiated amid fears of retaliatory U.S. tariffs.

Bhima Yudhistira Adhinegara, executive director of the Center of Economic and Law Studies (Celios), said the court’s decision effectively nullifies the leverage Washington used in negotiations.

“The threat of reciprocal tariffs no longer applies,” Bhima said, as quoted by Antara. “Everything done by Indonesia’s negotiation team in Washington can be considered void. Even the pressure for Indonesia to align itself politically because of tariff threats should now fall away.”

Bhima added that Indonesian exporters may even be able to claim refunds for excess import duties paid to the U.S. under tariffs that have now been declared unconstitutional.

He argued that Parliament no longer needs to place ART ratification on its legislative agenda, calling the agreement a potential trap that could undermine Indonesia’s long-term economic interests.

According to Celios, the ART contains several provisions that could disadvantage Indonesia if implemented. Bhima pointed to the risk of an influx of imported food, technology and energy products that could worsen the trade and current account balances and put pressure on the Indonesian rupiah.

He also warned that the agreement could restrict Indonesia’s ability to deepen economic cooperation with other countries, effectively locking the country into an exclusive U.S.-centered trade bloc.

Other concerns include the absence of technology transfer commitments, which Bhima said could stall Indonesia’s industrialization efforts and weaken local content requirements under the country’s domestic manufacturing policy.

Additional risks cited by Celios include the possibility of full foreign ownership in mining without divestment obligations, reduced transshipment opportunities, and provisions allowing cross-border transfers of personal data that could undermine Indonesia’s digital security framework.

Similar views were expressed by Mohammad Faisal, executive director of the Center of Reform on Economics (Core Indonesia), who said the ruling should prompt Indonesia and other U.S. trading partners to seek renegotiation.

“There are many elements in what we agreed to previously that pose serious risks to the domestic economy,” Faisal said. “This should be a momentum for renegotiation.”

However, Faisal cautioned that uncertainty remains high. While the Supreme Court blocked tariffs imposed under emergency powers, Trump has vowed to pursue alternative legal avenues. Shortly after the ruling, he announced plans to introduce a temporary 10% global tariff lasting up to 150 days under a different statute.

“That means tariffs can still be maintained, even if at lower levels,” Faisal said, adding that U.S. trade policy remains fluid and unpredictable.