Jakarta. Indonesia’s chief negotiator recently denied that a 'poison pill' clause had caused Jakarta’s tariff talks to stall, citing that the negotiations they had could not be compared with those of Malaysia.

Kuala Lumpur got ahead of Jakarta in the tariff talks, as its prime minister Anwar Ibrahim managed to clinch a deal in late October. While the preliminary agreement sees Indonesian goods being subject to 19 percent tariffs, Jakarta has been nudging Washington to drop the import duties on crude palm oil (CPO) on the grounds that the agrifood commodity cannot grow on American soil. Malaysia -- Indonesia's top competitor in global CPO trade -- has already secured a tariff-free treatment for its US-bound palm oil in the latest trade accord.

However, the document showed US President Donald Trump threatening to slap higher tariffs if Malaysia strikes a trade pact with a country that Washington deems to jeopardize its “essential interests”. The document does not explicitly mention China, but analysts have pointed out that this was an attempt by Trump to weaken Beijing’s influence in Southeast Asia. A Financial Times article quoting an anonymous government official wrote that Indonesia had been resisting this poison pill or loyalty clause to safeguard its “economic sovereignty”.

Airlangga Hartarto, the senior minister who had been helming the negotiations, commented on the poison pill reports when asked by the press about the poison pill clause. 

“There is no such thing. The [US] trade negotiations with Malaysia and those of Indonesia are different,” Airlangga said in Jakarta on Wednesday evening.

Airlangga admitted that he would engage in another round of discussions with US Trade Representative Jamieson Greer this week. He did not say whether this would be an in-person or virtual meeting. In Airlangga's latest statement, the economic tsar said that both governments were still trying to find the best time to wrap up the negotiations.

Beijing recently warned Malaysia against striking agreements that “damage global trade development and regional cooperation, nor should they harm the interests of China”. 

At home, the Indonesian side keeps on postponing its trade deal targets, sometimes attributing the delays to the US government shutdown. In the past, Airlangga had said that talks could pick up pace right after South Korea’s APEC Summit. 

China is not only Indonesia’s top trading partner, but also its leading foreign investor. While Indonesia is in the red when doing business with China, what goes on with the US is the polar opposite.

According to the Central Statistics Agency (BPS), Indonesia enjoyed a non-oil and gas surplus of a whopping $17.40 billion between January and October 2025 with the US. On the other hand, Indonesia registered $17.74 billion in trade imbalance with China over the same ten-month period. 

President Prabowo Subianto seems to be keen on getting close to both Trump and his Chinese counterpart Xi Jinping, as the Indonesian leader embraces what he calls a “good neighbor policy”. 

Prabowo has been backing Trump’s Gaza peace efforts to the point where the latter called him “a friend”. Prabowo also traveled to China’s military parade in September to remain close with Xi.

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