TEMPO.CO, Jakarta - The Center on Reform on Economics (CORE) Indonesia assesses the reciprocal tariff agreement between the United States and Indonesia as a new pattern of economic exploitation directed at developing countries. The White House, meanwhile, describes the pact as a "Great Deal" that will usher in a new era of bilateral relations.
According to CORE, the details within the 45-page agreement indicate a blatant American ambition to exploit the Indonesian market. "We also believe that the negotiating team failed to voice the interests of domestic industries and consumers," CORE stated in a press release on Friday, February 20, 2026.
CORE highlights an extraordinary disparity between the obligations placed on Indonesia versus those on the U.S. The think tank specifically points to the surge in Indonesia's commercial commitments, which climbed from an initial US$ 22.7 billion to US$ 33 billion in the final document.
"In fact, looking at the latest document finalized and agreed upon on February 20, 2026, Indonesia is not only battered, but also loses its dignity and independence to manage the economy based on national interests," CORE wrote.
The organization argues that the U.S. appears to have locked every policy aspect to suit its own interests, spanning investment, agriculture, critical minerals, digital trade, services, and the insurance industry.
The following are CORE's five key views on the U.S.-Indonesia trade agreement:
1. What Indonesia gains is highly disproportionate to the obligations it must fulfill
Although Indonesia's tariffs have been reduced to 19 percent, many other nations enjoy significantly lower rates. Conversely, Indonesia must commit to US$ 33 billion in commercial spending, invest directly in the U.S., and accept clauses requiring comprehensive regulatory reform and unlimited investment access. Meanwhile, the U.S. merely offers a tariff reduction that previously did not exist and retains the power to impose unilateral tariffs or terminate the deal with just 30 days' notice.
2. Rearranging non-tariff policies has eroded the state's role in protecting domestic producers and consumers
The overhaul of non-tariff policies for agricultural products, cosmetics, pharmaceuticals, and digital technology endangers domestic consumers. Beyond facilitating the flow of U.S. goods, the removal of these protections potentially stifles the Indonesian insurance industry, both state-owned and private. Furthermore, the agreement reportedly requires Indonesia to remove "halal certification" mandates and labeling requirements for non-halal U.S. products. This condition stands in direct conflict with the values of Indonesia's 240 million Muslim consumers.
3. The U.S. prioritizes its national interests by suppressing the interests of partner countries
The specific obligations detailed in the agreement show that Indonesia’s requirements far outweigh its benefits. Indonesia is now required to consult with and comply with U.S. requests to ensure American companies can penetrate the domestic market. Moreover, Indonesia must review the practices of foreign firms that could harm the U.S. trade balance and support efforts to eradicate transshipment practices deemed harmful to the U.S. Indonesia is even threatened with a 32 percent reciprocal tariff if it enters trade deals with other countries that potentially endanger U.S. national interests, effectively limiting Indonesia's sovereign economic cooperation.
4. Indonesian exports are unlikely to gain much benefit, while the potential for increased imports is higher
While leading exports like textiles and apparel will be exempt from reciprocal tariffs, this 0 percent rate applies only to a specific quota, creating a new layer of restriction. On the other hand, Indonesia must eliminate all import quotas, licenses, and tariff restrictions on U.S. products. The U.S. also demands broader access for its digital and financial service companies. In this context, the elimination of tariffs for Indonesian manufactured goods appears to be an illusion.
5. Downstreaming is threatened, and farmers are increasingly cornered
Indonesia is required to remove export restrictions on critical minerals, divestment requirements, and local content rules in the mining sector, contradicting the spirit of Law No. 3 of 2020 regarding domestic downstreaming. In the agricultural sector, drastic liberalization is occurring through the removal of commodity balance policies and the granting of permanent status to U.S. plant and animal products. The commitment to purchase US$ 4.5 billion in agricultural goods with specific minimum volumes seems more like an effort to solve the U.S. agricultural crisis than to benefit the Indonesian people.
Meanwhile, exempting U.S. companies from Domestic Component Level (TKDN) requirements creates an unfair environment for other investors and weakens the national strategy for industrial deepening.
Read: Celios Warns Indonesia-US Trade Pact Threatens Industry
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