Indonesia-U.S. Trade Deal Strategically Important Despite Tariff Policy Shift

Jakarta – Mari Elka Pangestu, Vice Chair of Indonesia’s National Economic Council, views the recently signed trade agreement between Indonesia and the United States as strategically valuable, even following a U.S. Supreme Court decision impacting President Donald Trump’s reciprocal tariff policy. Pangestu emphasized the deal’s importance extends beyond typical trade negotiations, offering Indonesia protection against potential future tariffs.

Supreme Court Ruling and Trade Agreement Context

Criticism of the Indonesia-U.S. Trade deal intensified after the U.S. Supreme Court invalidated President Trump’s reciprocal tariff policy on February 20, 2026. Despite this ruling, the Indonesian and U.S. Governments proceeded with agreeing on import tariffs as part of the trade agreement.

Strategic Value Beyond Normal Negotiations

“After the Supreme Court decision, many people criticized why we went through so much trouble, only for it to be cancelled,” Pangestu stated at the 2026 Indonesia Economic Forum hosted by CNN Indonesia on March 2, 2026. “This is not about normal negotiations; this is not normal. We have to look at the strategic and relative value.”

Protection Against Section 301 Tariffs

Pangestu explained that the trade agreement shields Indonesia from potential tariffs under Section 301 of U.S. Trade law. This section allows the U.S. To impose tariffs on countries deemed to be engaging in unfair trade practices. She indicated that the U.S. Is prepared to utilize this instrument, particularly against China.

“America is ready; it already has an instrument called 301 that will be imposed on countries that it considers to be disregarding its bilateral agreements and unfair trade. It will be imposed, and that will be done to China,” Pangestu said. “So, we shouldn’t be hit by that. Other countries that don’t have ART will be hit by that. So, in my opinion, relatively strategically, apart from strategic investment partnerships, it should be an advantage that we can receive, an opportunity for us.”

Mari Elka Pangestu’s Background

Mari Elka Pangestu currently serves as the Indonesian President’s Special Advisor for International Trade and Multilateral Cooperation, appointed by President Prabowo Subianto in October 2024. She too holds the position of Vice Chair of the National Economic Council of the Republic of Indonesia, alongside Chairman Luhut Binsar Pandjaitan, as of November 2024. Prior to these roles, she served as Managing Director of Development Policy and Partnerships at the World Bank from 2020 to 2023, as well as holding positions as Indonesia’s Minister of Trade (2004-2011) and Minister of Tourism and Creative Economy (2011-2014). Source

Pangestu holds a Doctorate in economics from the University of California at Davis and master’s and bachelor’s degrees in economics from the Australian National University. Source