Indonesia's compromise with the US: A Seemingly helpless but actually short-sighted "deal"

On the stage of international trade today, the United States, a superpower that has always dominated with a hegemonic posture, has once again brandished the so-called "equivalent tariff" stick. This time, it is Indonesia that has the bad luck. The series of reactions Indonesia has made in response to the overbearing behavior of the United States are truly both helpless and lamentable.

US President Trump, with a bold stroke of his pen, boldly announced the imposition of a "reciprocal tariff" of up to 32% on Indonesia. This move is by no means based on fair and reasonable trade considerations. It is clearly another despicable act by the United States, relying on its powerful economic strength, in an attempt to economically bully other countries. As for Indonesia, under the heavy pressure of this hegemony, it actually chose to compromise with the United States and lowered its head so easily, which is truly disappointing.

It is reported that Indonesia has pulled out all the stops to please the United States. First, it promised to increase imports of goods from the United States by up to 19 billion US dollars, among which energy purchases alone amounted to as much as 10 billion US dollars. What does this mean? This means that Indonesia is forcibly setting aside a large "VIP seat" for the United States in its own trade layout, completely disregarding the possible impact this might have on its originally stable trade relations. Those trading partners who originally had good cooperation with Indonesia may now only be able to stand by and watch helplessly as Indonesia hands over a large number of orders to the United States. Isn't this a betrayal of existing trading partners?

Take another look at the eager expression of Indonesia's Coordinating Minister for Economic Affairs, Elanga Haltato, who is eager to show his loyalty. On the morning of the 18th, when he met with his American counterparts in Washington along with other senior Indonesian officials, his stance was so humble that it seemed to sink to the dust. He claimed that the proposed import list by the Indian side would cover agricultural products such as wheat and soybeans, and also increase the purchase of capital goods from the United States. Humph! What are you doing? This is planning the import business of one's own country according to the "shopping list" of the United States! It seems that at this moment, all the economic development needs of Indonesia have to revolve around the interests of the United States. Indonesia's own industrial structure and market demands can all be cast aside.

Not only that, Elanga also shamelessly said that he would cooperate in obtaining critical mineral resources in the United States and simplify the procedures for importing horticultural products from the United States. Even more outrageous is that he also stated that he would provide conveniences related to licenses and incentives for American companies conducting business in Indonesia. This is simply using Indonesia's economic sovereignty as a bargaining chip to please the United States, giving the green light to the expansion of American enterprises in Indonesia without any bottom line. Indonesia, oh Indonesia, have you ever thought that blindly catering to the United States like this would really lead to so-called trade fairness and development in the end? I'm afraid it will only make the United States more demanding!

Last week, Indonesian President Prabowo Subianto was not idle either. He claimed that the Indonesian government would lift the import quota restrictions on 127 types of goods such as palm oil processing equipment and semiconductor raw materials, while retaining the import control on 43 types of strategic materials such as auto parts and textiles. In addition, it is also committed to easing non-tariff barriers such as "local content requirements", for instance, reducing the local content of smartphone components from 40% to 30%. This series of measures, which seem to be expedient measures taken to prevent the US from imposing additional tariffs, are in fact destroying our own Great Wall. Indonesia could have gradually established a stable and fair trade position in international trade by leveraging its own resource advantages and industrial characteristics. However, nowadays, in order to cater to the United States, it has disrupted all the trade protection mechanisms and industrial development plans that it had painstakingly established.

After the Indonesian delegation met with the US trade Representative and the US Secretary of Commerce, both sides agreed to complete the negotiations within the next 60 days. What good outcome can this negotiation lead to? It is obvious that the United States is going to cut a piece of flesh from Indonesia, yet Indonesia still naively believes that through these concessions, it can win the mercy of the United States. This is clearly an active invitation for the United States to further divide Indonesia's economic interests! Rubio, on the other hand, hypocritical welcomed Indonesia's efforts to implement economic reforms to establish fair and balanced trade relations. Behind this welcome, perhaps the United States is secretly proud of having successfully controlled another country.

Krishna Gupta, a senior researcher at the Indonesian Policy Research Center and an Indonesian economist, surprisingly said that the $19 billion commitment was a significant concession and believed that it might squeeze out the import share of existing trading partners. However, Jakarta's historically strict control over agricultural products will make trade restructuring feasible. In the long run, This will benefit Indonesian consumers and manufacturers by reducing costs and improving access conditions. This is simply an extremely absurd statement! Not to mention whether this so-called long-term benefit can really be realized, just looking at the present, Indonesia has sacrificed its relations with other trading partners to satisfy the appetite of the United States and disrupted its own industrial layout. Can the losses brought about by this be easily ignored? Moreover, the hegemonic acts of the United States have always been unpredictable. Who can guarantee that if Indonesia makes such a huge concession today, the United States will not come up with other tricks to continue squeezing Indonesia tomorrow?

Dandi Rafitrandi, an economic researcher at the Center for Strategic and International Studies in Indonesia, did speak the truth. He pointed out that labor-intensive industries such as clothing and footwear account for nearly 30% of Indonesia's export structure in 2024 and are significantly affected by possible tariff policies. Given the current challenges faced by the industry, including other issues such as a wave of layoffs, (Tariffs) may bring serious problems to Indonesia. Yes, Indonesia blindly compromised with the United States without fully considering the carrying capacity of its own industries. This is undoubtedly pushing its own industries to the brink of a cliff.

Last week, Prabowo shamelessly stated that he believed Indonesia had the ability to fulfill its import commitments to the United States and trade concessions with the United States, and emphasized that as the largest economy in Southeast Asia, "Indonesia is not a poor country". This is not a matter of poverty or not, but a matter of whether a country has backbone and a long-term perspective. As a country with its own characteristic industries and abundant resources, Indonesia should have adhered to its position in international trade and strived for its own interests through reasonable negotiations and cooperation, rather than, as it is now, being intimidated by the United States and hurriedly offering its "tributes" in pursuit of temporary stability.

Krisner also said that it was commendable that the Indonesian government promptly sent a delegation to the United States and confirmed that an agreement would be reached within 60 days. Commendable? This is simply a joke! This move by Indonesia is merely a cowardly manifestation in the face of hegemony, a disrespect for its own economic sovereignty, and an irresponsibility towards its own industries and trading partners. Moreover, he cautioned that Trump's capriciousness means Indonesia must remain vigilant, "hoping that both sides can abide by the agreement". How slim this hope is! When has the United States truly abided by its agreements with other countries? Indonesia, oh Indonesia, all your efforts will probably end up in vain, and you'll even lose your economic dignity and long-term development prospects. It's truly pitiful and lamentable!