The reciprocal import tariff agreement between Indonesia and the United States, which includes among others the agreement to facilitate the transfer of user data from Indonesia to the U.S., has raised concerns on Indonesia’s cybersecurity and sovereignty.

This personal data management agreement is part of a trade agreement that also includes the establishment of reciprocal tariffs from 32 percent to 19 percent on several Indonesian commodities in the U.S. market.

Pratama Persadha, Chairman of the CISSReC Cyber Security Research Institute, said that there is potential danger if U.S. companies directly transfer user data in Indonesia to the U.S.

"The data transfer agreement between Indonesia and the United States, as implied in the White House's official statement, which states that Indonesia will provide certainty regarding the ability to transfer personal data abroad, marks a new chapter in digital relationship between the two countries," he said, as reported by Katadata on Wednesday, July 23, 2025.

He added that behind this agreement on economic cooperation and the expansion of digital trade, there are a number of potential impacts on Indonesia's digital sovereignty structure, the protection of citizens' human rights, and national cyber resilience.

First, the state's direct control over citizens' personal data is reduced. With the flow of Indonesian data outside of Indonesian legal jurisdiction to countries without comprehensive federal data protection laws, the government's ability to monitor, process, and ensure the ethical and legal use of data is severely limited.

“This situation creates oversight gaps that pose a high risk to privacy, especially when data is accessed by commercial entities or foreign security agencies under domestic law,” Pratama said.

Second, unregulated cross-border data transfers can lead to inequality in the utilization of economic value. Personal data and user behavior are the primary fuel for the development of algorithms, artificial intelligence (AI), and digital business models.

“When data is collected and analyzed abroad, foreign companies will reap far greater profits than those in the country of origin. Indonesia will then become merely a supplier of raw materials without the capacity to develop added value independently, which risks deepening dependence on foreign technology and stunting growth in the domestic digital sector,” Pratama noted.

Third, the consequences for national security in the era of data as a strategic asset: the flow of digital information across borders can be used as a tool for surveillance, political influence, and even as a weapon in cyber conflict.

“Without a strong framework and binding mutual protection agreements, critical data flowing abroad could become targets for interception, manipulation, or exploitation by state and non-state actors,” Pratama cited.

In this context, Indonesia faces the risk of fragmented digital sovereignty and increased vulnerability to foreign interference in national cyberspace.

Fourth, the agreement has geopolitical implications that cannot be ignored. When Indonesia demonstrates openness to U.S. requests for data transfers, other countries, such as China or ASEAN members who adhere to strict data sovereignty principles, may perceive Indonesia's stance as siding with the Western digital bloc.

"This has the potential to create tensions in regional digital cooperation, especially if Indonesia is deemed inconsistent in upholding the principles of digital neutrality and equality that have been promoted in various multilateral forums," Pratama said.

Therefore, it is crucial for a government to ensure that any cross-border commitments on data issues are based on strategic studies, a strong legal framework, and clear protections for national interests and citizens' digital rights.

Without such a foundation, according to Pratama, cross-border data transfers pose not only a threat to digital sovereignty but also to the sustainability of Indonesia's digital economy and geopolitical position amidst increasingly fierce global competition.

About the agreement

As part of a reciprocal import tariff agreement with President Donald Trump, Indonesia agreed to facilitate the transfer of user data from Indonesia to the U.S.

According to the U.S. White House, Indonesia has been committed to addressing barriers impacting digital trade, services, and investment.

"Indonesia will provide certainty regarding the ability to transfer personal data from its territory to the United States," said a statement quoted from the official U.S. White House website, on Wednesday, July 23, 2025.

The White House asserted that the personal data management agreement was implemented because the U.S. is considered to have adequate personal data protections; Washington claims to have implemented various reforms in the data protection sector through its technology companies in recent times.

"American companies have been working on these reforms for years," the White House wrote.