U.S.-Indonesia trade deal on brink of collapse amid allegations of Jakarta backtracking

The high-profile trade deal between the United States and Indonesia is starting to wobble, with U.S. officials increasingly worried that Jakarta is backing away from what it promised, CNBC reported.

U.S. Trade Representative Jamieson Greer believes Indonesia is “backtracking” on several commitments it made during negotiations. Indonesian officials, meanwhile, have quietly let Washington know they’re uncomfortable with some of the binding terms and don’t want to be locked into obligations they may struggle to meet. At the centre of the tension is the U.S. view that Indonesia is retreating from pledges to remove non-tariff barriers that affect American industrial and agricultural exports, as well as commitments related to digital trade. Indonesia insists that’s not the case. According to one official, tariff discussions are still moving forward, and nothing major has gone wrong.

The disagreement comes just months after President Donald Trump celebrated the deal as a major win. Announced in mid-July, the agreement rolled back a threatened 32% tariff on Indonesia down to 19%. Trump also said Indonesia had agreed to major purchases — $15 billion worth of U.S. energy, $4.5 billion in American farm goods, and 50 Boeing jets — and promised that U.S. exports into the country would face no tariff or non-tariff barriers at all.

But now, behind closed doors, the mood appears far less upbeat. Indonesia is now openly saying it can’t fully carry out what it previously agreed to, and wants to renegotiate key commitments so they’re no longer binding. The shift was described as “extremely problematic” for Washington, warning that Indonesia could even jeopardise the entire deal.

This isn’t the first bump in the road. Late last year, Indonesia rejected a so-called “poison pill” clause — something Malaysia had accepted — that would allow the U.S. to cancel the agreement if Indonesia later signed a trade pact Washington didn’t like.

It’s a pattern that has emerged in several Trump-era trade announcements across Asia. When Trump said South Korea would invest $350 billion in the U.S., Seoul pushed back, ultimately agreeing to a mix of cash investments and a large shipbuilding fund. Japan did something similar after Trump claimed the U.S. would take 90% of profits from a proposed $550 billion Japanese investment; Tokyo later clarified that profits would be shared based on each country’s actual contribution.

For now, U.S. and Indonesian officials remain in talks — but the future of one of the administration’s most publicised trade wins looks increasingly uncertain.