The global trade war is entering a quieter but more revealing phase. While Indonesia moves toward finalizing a tariff agreement with the United States, negotiations between Washington and Beijing remain locked in containment mode. The contrast matters. It underscores a point often blurred in public debate: the trade war persists not because of tariffs themselves, but because China has never meaningfully reformed the trade practices that triggered them.
In Jakarta, officials say Indonesia’s negotiations with the US have entered the final legal stage. Negotiating teams from both countries are conducting legal drafting and “legal scrubbing” in Washington from January 12 to 19. All substantive issues have reportedly been agreed in principle, with the Agreement on Reciprocal Trade expected to be signed by President Prabowo Subianto and US President Donald Trump by the end of January.
This marks a shift from negotiation to finalization. Tariff exemptions for Indonesian exports such as palm oil, cocoa, coffee, and tea are now treated as settled outcomes rather than bargaining chips. In return, Indonesia has committed to opening market access for US products, addressing non-tariff barriers, and expanding cooperation in digital trade, technology, and national security. The deal is not dramatic, but it is structured, reciprocal, and legally anchored.
Global Trade War: Why China–US Talks Are Still Stuck
By contrast, China–US trade relations remain defined by a fragile truce rather than resolution. Talks led by China’s vice commerce minister Li Chenggang have prevented escalation, not produced reform. Beijing has agreed to defer tighter rare-earth export controls for one year and to increase purchases of US soybeans. Washington, in turn, has postponed sweeping 100-percent tariffs and avoided further immediate retaliation.
These are tactical pauses, not structural change.
China continues to rely on a state-driven trade model that distorts global markets. State-owned and state-backed firms benefit from subsidies, preferential financing, and regulatory protection that shield them from competition. Chronic overcapacity in sectors such as steel, chemicals, solar panels, and manufacturing fuels systematic dumping abroad. Prices are undercut through policy support, not efficiency.
Currency management and capital controls further insulate exporters from market pressure, while foreign firms operating in China still face barriers rarely encountered by Chinese companies overseas. Forced technology transfer may be less explicit than a decade ago, but regulatory pressure and informal coercion remain familiar. At the same time, Beijing increasingly uses export controls, anti-dumping probes, and WTO litigation as leverage rather than neutral enforcement tools.
This is why the global trade war has not ended. Tariffs persist because the incentives that produced them remain intact.
Indonesia’s Different Path in a Fragmented System
Indonesia’s progress with Washington reflects a fundamentally different approach. Jakarta is not seeking leverage through disruption or ambiguity. Instead, it is signaling predictability. By addressing non-tariff barriers, committing to reciprocal access, and anchoring talks in legal clarity, Indonesia has made itself an easier partner to conclude a deal with.
The broader lesson is straightforward. The trade war is no longer about headlines or personalities. It is about which economic models can function in a fragmented global system. Indonesia is adapting. China, for now, is still defending the model that made the conflict unavoidable.
