Indonesia refused to accept the so‑called "poison pill" and other US demands in a trade agreement. This calls into question America's efforts to curb China's influence in Southeast Asia.
The dispute arose during discussions of the terms of a preliminary agreement concluded in July, which included a 19 percent "reciprocal tariff" for Indonesia. Three people familiar with the negotiations confirmed that Indonesia rejected terms that the US had imposed on Malaysia and Cambodia.
The US attempted to introduce "poison pills" — "loyalty" clauses in the agreements that threaten to void them if countries make deals with competitors, jeopardizing American interests.
"We cannot agree to these clauses as they violate our economic sovereignty," said an Indonesian government representative.
The agreements with Malaysia and Cambodia require the countries to comply with US sanctions, avoid digital taxes that could hinder the operations of American companies, and to coordinate with Washington any digital trade deals with third countries.
In Indonesia there are concerns that such demands could limit the country's ability to make independent decisions, effectively subordinating it to American demands.
- On October 27 the US concluded bilateral trade agreements with Malaysia and Cambodia, and also signed a framework agreement with Thailand, which provides for cooperation in removing trade barriers.
