Indonesia Last Week

Indonesia Signed the US Trade Deal a Day Before SCOTUS Voids Trump's Tariffs. Government Response: 'Continue to Process.'

This week, the American Supreme Court struck down President Donald Trump's tariffs one day after Indonesia signed a trade deal with the United States. The deal eliminates Indonesian import taxes on American products and bundles in mandates requiring changes to Indonesian laws and regulations — including revisions to labor laws, regulatory practices, and access for American companies to Indonesian minerals. After the Supreme Court ruling, Trump imposed a fresh 10% tariff on the entire world using a different legal authority, one theoretically enforceable for 150 days and extendable only with US Congressional approval. Analysts from Celios say Indonesia no longer has to ratify the deal, noting the European Union has frozen its own ratification. International law professor Marco Market disagrees, arguing Indonesia would still have to ratify to avoid public and international embarrassment. The Indonesian government has stated it will continue to process the agreement. That's where things stand.

What Actually Happened

#ClaimDateEntitiesSource
1The United States Supreme Court struck down President Donald Trump's tariffs.United States Supreme Court, Donald TrumpSCOTUSBlog (archived)
2The Supreme Court ruling came one day after Indonesia signed a trade deal with the United States.United States Supreme Court, Indonesia, United StatesSouth China Morning Post (archived)
3The trade deal mandates that Indonesia eliminate import taxes on American products.Indonesia, United StatesU.S. Embassy (Jakarta) / Fact Sheet (archived)
4The trade deal includes mandates requiring changes to Indonesian laws and regulations.Indonesia, United StatesUSTR (Full Agreement PDF) (archived)
5The deal includes revisions to Indonesia's labor laws and regulatory practices.IndonesiaUSTR (ART Full Agreement) (archived)
6The deal provides American companies with access to Indonesian minerals.United States, IndonesiaThe White House (Fact Sheet) (archived)
7Indonesia's foreign policy doctrine is the principle of free and active (bebas dan aktif) non-alignment.IndonesiaLowy Institute (archived)
8Trump imposed new 10% tariffs on the entire world using a different legal authority after the Supreme Court ruling.Donald Trump, United States Supreme CourtThe White House (Presidential Action) (archived)
9The new tariffs are theoretically enforceable for only 150 days.Donald Trump, United StatesThe White House (Fact Sheet) (archived)
10Extending the new tariffs beyond 150 days would require approval from the United States Congress.United States Congress, United StatesCongressional Research Service (summary on Section 122) (archived)
11The European Union froze ratification of its own trade deal with the United States after the Supreme Court ruling.European Union, United States, United States Supreme CourtNBC News (archived)
12Analysts from Celios said Indonesia no longer has to ratify the trade deal.Celios, IndonesiaInstagram Video (Primary Source) (archived)
13International law professor Marco Market argued that Indonesia would have to ratify the deal anyway to avoid public and international embarrassment.Marco Market, IndonesiaInstagram Video (Primary Source) (archived)
14The Indonesian government said it would continue to process the trade agreement.Indonesian governmentIndonesian Cabinet Secretariat (Setkab) (archived)
15Trump has threatened countries that back out of their deals via social media.Donald TrumpBBC News (archived)

So. Last week, the United States Supreme Court — yes, that Supreme Court, the one that used to be about cases and is now about vibes — torpedoed the tariffs that President Donald Trump had been using as his favorite economic weapon. [1] It did so, with the timing of a slapstick pratfall, exactly one day after Indonesia signed a trade deal with the United States. [2]

Let that land for a second. The day after the deal. The day. After.

The deal itself, in case you missed the headline, is mostly about letting American products into Indonesia more easily — meaning us, the Indonesian side, are mandated to eliminate import taxes on those products. [3] “Eliminate” is the word. Not “reduce,” not “review,” not “form a working group to discuss the possibility of considering.” Eliminate. Because apparently our negotiating position was whatever the other side typed into the Google Doc first.

But it doesn’t stop at import taxes. The deal also bundles in a long list of mandates requiring changes to Indonesian laws and regulations. [4] Some of them — revisions to labor laws, regulatory practices, that sort of thing — could, in theory, be beneficial. [5] I’m told this is the part we’re meant to feel good about.

And then there are the other parts. The part where, in foreign policy terms, we have effectively given American companies an all-access pass to our minerals. [6] You know — the shiny rocks. The ones under the ground. The ones we keep being told are the future of the economy. Handed over with a bow.

For a country whose foreign policy doctrine has historically been bebas dan aktif — free and active, the principle of not taking sides between great powers — this is, let’s say, an interesting read. [7] I did mathematics. We may as well have taken the bebas dan aktif doctrine, set it on fire, and handed the shiny rocks to the Americans on a silver platter, all while we buff their shoes and whistle.

Now. The deal was signed. And then, one day later, the American Supreme Court declared Trump’s tariffs illegal. [8] Which would, in a sane timeline, be the part where everyone involved takes a deep breath, pours a coffee, and reopens negotiations.

We are not in a sane timeline.

Trump, in response, imposed a fresh 10% tariff on the entire world using a different legal authority — one that, in theory, is only enforceable for 150 days. [9] For it to last longer, the United States Congress would have to approve an extension. [10] Given how popular tariffs are in the United States right now, I am not betting on this horse.

So the trade deal Indonesia just signed, the one with all those mandates, is now being implemented in a world where the central premise — the tariff regime that arguably justified the urgency — is no longer the law of the land in the United States. Meanwhile, the Indonesian government has stated that it will continue to process the agreement. [14] “Continue to process.” I have read that sentence several times. It does not say ratify. It does not say implement. It does not say pause. It says “continue to process,” which is a phrase I associate with customer service chatbots telling me my refund is being processed, again, for the fourth month in a row.

The European Union (EU), for its part, has already frozen ratification of its own trade deal with the United States following the Supreme Court ruling. [11] The EU being cautious and pausing for reflection. Cute. I remember when we used to do that.

Analysts from Celios, an Indonesian economic think tank, have made the same argument: that Indonesia no longer has to ratify the deal at all. [12]

Other analysts, though, disagree. International law professor Marco Market has argued that Indonesia would have to ratify the deal anyway — because the alternative is “public and international embarrassment and the disrepute of our nation on trade agreements.” [13] Which is a sentence. Which is presumably a sentence a professor said out loud. And which translates, roughly, to: if we don’t sign, we’ll be embarrassed. So we have to sign.

Here is the actual argument. The argument against having a choice is that not choosing is embarrassing. The argument for ratifying a deal whose central justification evaporated in 24 hours is that pulling out would make us look bad. The argument for staying in a sub-receiver position is that leaving would be impolite.

Meanwhile, Trump has been on social media threatening any countries that back out of their deals. [15] So we have a Supreme Court ruling saying one thing, a president doing another, an Indonesian government committing to a third, and a public being told to sit quietly while the adults figure it out.

This is, on paper, the deal we signed. The deal that requires changes to our laws, our regulatory practices, and the doctrine of bebas dan aktif itself. We signed it, the other side’s court invalidated the underlying tariff regime the next day, the other side’s president pivoted to a new tariff regime, and our government is “continuing to process” the agreement.

To be fair — and I want to do this with a straight face — there is nothing more patriotic than giving everything to a foreign country at the first sign of trouble. That is the position, dressed up in the language of national interest.

Who’s the antecasing now.

Sources

Original video: TikTok source