TEMPO.CO, Jakarta - Indonesia has rejected demands from the United States to buy U.S. drones as part of their trade deal, as reported by The Straits Times citing relevant sources, as quoted from Antara.
Indonesia has agreed to a large number of demands made by the U.S. in their trade talks, including plans to import fuel from the U.S. as a replacement for Singapore, according to the report on Wednesday.
However, Indonesia rejected provisions deemed to violate the constitution, including the demand to acquire U.S. drones to monitor the South China Sea, the report added.
Indonesia and the U.S. are in the final stages of tariff negotiations, which would see the U.S. reducing import tariffs on Southeast Asia's largest economy from the previous 32% to 19%.
Indonesia recorded a trade surplus of US$18 billion with the U.S. in 2024. In return for the tariff reduction, Indonesia is required to provide concessions to balance its trade with America.
Indonesia has accepted U.S. demands to relax restrictions on American car imports. Jakarta has also agreed to remove non-tariff barriers, particularly "local content requirements," for U.S. products in three key sectors—information and communication technology, medical equipment, and data center equipment, the two officials said.
These concessions are significant. U.S. technology giant Apple leads the Indonesian mobile phone market by revenue, with iPhone imports worth around US$2 billion per year, according to government data. Sales of U.S. medical equipment, such as MRI and CT scanners from GE HealthCare, are worth around US$100 million per year, and U.S. giants such as Hewlett-Packard, Dell Technologies, and IBM currently dominate the Indonesian data center equipment market.
Indonesia has also promised to significantly import fuel from the U.S. while reducing purchases from Singapore. More than half of Indonesia's fuel imports come from Singapore, which refines crude oil from the Middle East, Australia, and Malaysia, ST reported in May 2025, while the U.S. contributed less than 0.1 percent of Indonesia's fuel imports in 2024.
Indonesia will receive U.S.-made cars that meet Federal Motor Vehicle Safety Standards and U.S. emission standards, an official said. These imports do not need to meet safety and emission tests required by Indonesian transportation authorities.
Jakarta has also agreed to support the U.S. electric vehicle industry by supplying any intermediate raw materials to U.S. companies to make battery cells, such as precursor chemical compounds of nickel.
Non-Trade Issues
The U.S. also discussed non-trade issues during the trade talks.
ST previously reported that the U.S. wanted "commitment from Indonesia to readjust its South China Sea policy to safeguard its sovereign rights and national jurisdiction, ensure alignment with international law, and enhance maritime domain awareness and regional cooperation."
However, Indonesia has informed the US that they cannot meet the South China Sea demand, as well as the demand to buy U.S.-made drones, both sources said.
Jakarta has insisted that these demands are unrelated to the tariff talks' objectives, which are to balance trade between the two countries, they added.
Indonesia also objected to Washington's demand to consult with them before signing any digital trade agreement with potential third parties that could harm U.S. interests.
One source told ST, “Regarding the digital economy, Indonesia emphasised the importance of respecting the sovereignty of both nations.”
“That would constrain Indonesia’s foreign cooperation. Such restrictions are incompatible with Indonesia’s ‘independent and active’ foreign policy principle, as mandated by our Constitution,” the source added.
Signing Schedule
On January 22, Indonesian President Prabowo Subianto appeared with U.S. President Donald Trump in Davos at the World Economic Forum.
This coincided with Jakarta's decision to support the Trump-initiated Board of Peace, a move interpreted by analysts as a geopolitical effort to advance the trade deal process.
At the Board of Peace's launch in Davos, Trump shook hands with Prabowo and was seen jovially patting his back.
“It appears that President Prabowo Subianto possesses excellent political instincts. Joining the Board of Peace serves as a very good move for Indonesia to curry favour while Indonesia is facing US pressures in tariff negotiations,” said international relations analyst Teuku Rezasyah from Padjadjaran University to ST.
According to ST, the next round of talks is scheduled for February and that Prabowo's initial plan included flying from Davos to Washington to sign the agreement.
However, this did not materialize, and Prabowo returned to Jakarta on January 24. The initial schedule was made in the hope that the negotiating teams of both countries would complete drafting the tariff agreement laws on January 19.
Read: Govt Responds to Reports Indonesia Was Asked to Buy US Maritime Drones
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