A researcher from the Department of Economics at the Centre for\nStrategic and International Studies (CSIS), Riandy Laksono, has\nconcluded that the trade agreement between Indonesia and the United\nStates generates no meaningful economic benefits. He stated that the\nAgreement on Reciprocal Trade (ART) document is fundamentally about how\nthe US protects its commercial and security interests, rather than about\ntariff reductions.<\/p>\n
Riandy explained that whilst 1,819 Indonesian products achieved\nzero-per-cent tariffs, this only covers approximately 2 per cent of\nIndonesia\u2019s total exports. \u201cOf all our exports to America, only 24 per\ncent received the additional zero per cent tariff. It should be noted\nthat our exports to America constitute only 10 per cent of our total\ntrade, so the total market access we secured represents just 2 per cent\nof our overall trade,\u201d he stated during a media briefing at CSIS offices\nin Jakarta on Friday, 27 February 2026.<\/p>\n
Another concern highlighted by Riandy involves textile products\nreceiving zero-per-cent tariffs through a tariff rate quota mechanism.\nUnder this scheme, the duty-free quota is determined by how much of the\nexported product uses raw materials sourced from the United States. The\nproblem, according to Riandy, is that the majority of textile raw\nmaterials used in Indonesia\u2014such as cotton and man-made fibres\u2014are\nimported from China.<\/p>\n
Riandy detailed that cotton imported from the US accounts for only\napproximately 8.6 per cent of supplies, whilst China accounts for 29.4\nper cent. Man-made fibres from the US represent just 0.3 per cent,\nwhilst China supplies 65.1 per cent. Furthermore, US raw materials are\nsignificantly more expensive. \u201cUsing raw materials from America will\ncause considerable disruption to the supply chain,\u201d Riandy noted.<\/p>\n
Nevertheless, Riandy argued that this agreement could protect\nIndonesia from the bullying tendencies characteristic of President\nDonald Trump, stating that no country is immune from the instability of\nUS policy. Accordingly, Riandy characterised the government\u2019s decision\nto sign the ART as an effort to secure Indonesia\u2019s position. \u201cIf we\ncannot fight bullying, joining the gang is the least we can do. I think\nthat is the answer,\u201d he said.<\/p>\n
President Prabowo Subianto and US President Donald Trump signed the\nreciprocal trade agreement (ART) in Washington DC on Friday morning, 20\nFebruary 2026 (Indonesian time). The signing formally implemented a 19\nper cent tariff on Indonesian products entering the United States.<\/p>\n
Coordinating Minister of Economic Affairs Airlangga Hartarto stated\nthat the purpose and vision of the ART is to achieve prosperity, support\nrobust supply chains, and respect the sovereignty of both nations. \u201cSo I\nemphasise this: respecting the sovereignty of each nation. That is part\nof the signed agreement,\u201d Airlangga said during a press conference on\nFriday, 20 February 2026.<\/p>", "url": "https:\/\/jawawa.id\/newsitem\/csis-no-economic-benefits-from-indonesia-us-trade-agreement-1772182855", "image": "" }, "sponsor": "Okusi Associates", "sponsor_url": "https:\/\/okusiassociates.com" }