Not long after the reciprocal trade agreement between Indonesia and the United States was signed by President Prabowo Subianto and President Donald Trump, the U.S. Supreme Court struck down the global reciprocal tariff policy that had served as the backbone of pressure in those negotiations. If the very policy that gave birth to the agreement has collapsed, Indonesia should reconsider and, if necessary, revoke the deal.

From the outset, the agreement was negotiated under the shadow of tariffs. Indonesia sought to avoid a 32 percent tariff burden and ultimately settled at 19 percent. That compromise was framed as pragmatic diplomacy. Yet once the global tariff policy itself was invalidated, and other countries ended up with lower tariffs without having to make sweeping concessions or endure protracted negotiations, a comprehensive reassessment becomes unavoidable, particularly of the strategic concessions Indonesia has already placed on the table.

Indonesia Gave Too Much

Under this agreement, Indonesia offered extensive concessions: expanded market access, aircraft purchases, bioethanol imports, broader access to its critical minerals sector, and even a commitment to import coal from the United States. This is where the imbalance becomes unmistakable.

Indonesia is one of the world’s largest coal exporters. Our reserves are abundant. At the same time, we are discussing early retirement of coal-fired power plants and striving toward net zero emissions. Yet within this agreement, Indonesia is expected to open space for coal imports from the United States.

Indonesia is one of the world’s largest coal exporters. Our reserves are abundant. At the same time, we are discussing early retirement of coal-fired power plants and striving toward net zero emissions. Yet within this agreement, Indonesia is expected to open space for coal imports from the United States.

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What logic justifies a major coal producing country importing coal from abroad, especially when it is simultaneously attempting to reduce domestic dependence on fossil fuels? This is not merely puzzling. It runs counter to the spirit of energy transition.

The so called reciprocal agreement feels uneven. The United States gains access to Indonesia’s critical minerals, the backbone of the global energy transition. Nickel, cobalt, tin, and rare earth elements are among the most strategic commodities of this century. Meanwhile, Indonesia must widen its market for fossil energy products.

The exploitation of critical minerals is no trivial matter. In Morowali and other parts of Sulawesi, nickel industry expansion continues apace. Smelters rise, investment flows in, and economic activity accelerates. Yet many of these facilities still rely on captive coal fired power plants. In reality, nickel destined for the global electric vehicle market is being processed with high emission energy.

Around industrial zones, social and ecological changes are increasingly visible. Forests are pressured. Coastal areas are affected. Communities face shifts in air and water quality. The global energy transition, celebrated internationally, leaves environmental burdens at the local level.

Now imagine American mining corporations entering Indonesia in greater numbers. Captive coal plants could proliferate further, coal use intensify, and ecological pressure deepen.

If, in addition to expanding critical mineral extraction, Indonesia must also open the floodgates for U.S. coal imports, we risk falling into dual dependency. We would depend on global mineral markets and on external fossil fuel supply at the same time.

Not Energy Sovereignty

Even more troubling is the inconsistency of U.S. climate commitments. In certain periods, Washington has weakened or even withdrawn from the Paris Agreement. Its energy policies are heavily shaped by domestic political dynamics, including strong support for oil and gas industries.

This means Indonesia could tie its strategic mineral sector and energy policies to a partner whose climate commitment fluctuates with political cycles.

If U.S. energy priorities swing back toward fossil expansion while Indonesia has already granted broad access to its critical minerals and opened its market to coal imports, the direction of Indonesia’s energy transition could gradually align with external interests. We could find ourselves expanding mineral production, intensifying extraction, and preserving coal infrastructure to maintain trade stability.

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Meanwhile, plans for early coal plant retirement and renewable energy acceleration could slow. The agreement reveals an unhealthy pattern in which short term pressure is answered with long term strategic concessions. To secure a 19 percent tariff rate, Indonesia has rolled out the red carpet for resource exploitation and opened space for fossil energy imports that it does not fundamentally need.

A Step Backward for the Energy Transition

Indonesia requires a consistent and sovereign energy transition. It does not need a transition shaped by tariff pressure, political fluctuations in another country, or the interests of global fossil industries.

An agreement that was already imbalanced from the beginning and has now lost the policy foundation that justified its urgency deserves serious evaluation. If it is proven to undermine Indonesia’s long term national interest, the courage to revoke it would reflect responsible leadership.

Critical minerals are assets of the future. Energy is the foundation of sovereignty. Neither should be exchanged for concessions that fail the test of fairness.

Critical minerals are assets of the future. Energy is the foundation of sovereignty. Neither should be exchanged for concessions that fail the test of fairness.

If Indonesia aspires to lead a just energy transition, the decisions made today must reflect long term vision rather than reactive responses to temporary pressure.

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The views expressed in this article belong to the author and do not necessarily reflect the editorial policy of Middle East Monitor.

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