Indonesia’s synthetic fiber and filament yarn producers have voiced strong concerns that unresolved domestic policy issues could undermine the country’s ongoing tariff negotiations with the United States. The Indonesian Filament Yarn and Fiber Producers Association (APSyFI) warned that technical regulations which remain unreformed have triggered signals that the hard-won trade agreement with Washington could be cancelled.

APSyFI Chairman Redma Gita Wirawasta pointed to the United States’ strict stance on transshipment as a key issue. Under US rules, imported goods must be accompanied by a clear and verifiable certificate of origin, leaving little room for ambiguity. Transshipment refers to the practice of routing goods—often originating from China—through third countries such as Indonesia before being exported to the US, a practice Washington is determined to prevent.

According to Redma, the US government has consistently raised concerns over transshipment, yet Indonesia’s Ministry of Trade has not demonstrated meaningful improvements in the procedures for issuing certificates of origin that could effectively prevent such practices. The absence of credible safeguards, he argued, risks eroding trust in Indonesia’s trade commitments.

Beyond its implications for bilateral negotiations, the policy gap is also seen as detrimental to domestic market stability. Indonesia’s textile industry is already under heavy pressure from a surge of low-priced imported products that have weakened the competitiveness of locally made goods. Stronger controls, industry players say, are essential to curb excessive imports and protect domestic producers.

Similar criticism has been directed at the Ministry of Industry regarding import recommendations, known as technical considerations (Pertek), which are required before import permits can be issued by the Ministry of Trade. Redma noted that despite repeated calls for greater transparency in the Pertek process, no significant reforms have materialized.

In this context, APSyFI stressed that strengthening the domestic market should be a top priority, especially as reports emerge that the Indonesia–US tariff agreement could collapse. While the association remains confident that the government’s negotiating team is still working to find common ground, the potential consequences of a failure are severe.

Should the agreement be cancelled, the textile industry would face even harsher conditions. Many factories are already struggling, with some forced to shut down amid declining demand and rising competition. Redma emphasized that Indonesia’s large domestic market could serve as a vital buffer for local products, particularly for companies that have long relied on exports to the US.

However, he criticized what he described as a pro-import bureaucracy that continues to prioritize easing import flows under the pretext of raw material shortages. In reality, he argued, domestic raw material capacity is more than sufficient, making such justifications questionable and harmful to local industry.

Earlier, Reuters reported that the trade agreement announced in July 2025 was at risk after Indonesia allegedly withdrew several commitments previously agreed upon. A US official, speaking anonymously, told Reuters that Jakarta had backtracked on parts of the July deal, though no specific details were disclosed.

Amid these tensions, Coordinating Minister for Economic Affairs Airlangga Hartarto is scheduled to travel to the United States next week alongside the Indonesian delegation. The visit aims to finalize the legal drafting of the Agreement on Reciprocal Tariff (ART), with completion targeted for December, in line with the joint statement signed by both countries on July 22.