The ambitious plan to bolster trade ties between Indonesia and the United States through increased cotton imports is hitting a significant roadblock: the harsh reality of a struggling domestic spinning industry. While Jakarta looks to leverage higher U.S. cotton purchases to negotiate a strategic tariff reduction for Indonesian products to 19 percent, local manufacturers warn that these diplomatic goals are currently out of reach. The core of the problem lies in a dramatic slump in production capacity, leaving Indonesian factories with little appetite for more raw materials.

The situation is becoming increasingly dire for the upstream textile sector. Redma G. Wirawasta, Chairman of the Indonesian Fiber and Filament Yarn Producers Association (APSyFI), highlighted that the industry is currently operating in survival mode. "The U.S. is asking us to buy more cotton from them, but this will be difficult to implement as long as our spinning industry's utilization remains below 50 percent," Redma stated on Wednesday, February 18, 2026. With factories running at less than half their intended capacity, the demand for raw cotton has naturally withered.

The shift in trade volume over the last few years tells a story of industrial decline. Before the pandemic, Indonesia was a major global buyer, importing roughly 600,000 tons of cotton annually, with 300,000 tons sourced directly from American farmers. By 2025, those figures have plummeted. Total imports have halved to 300,000 tons, and the American share has shrunk even more drastically to a mere 70,000 tons. This decline is not a matter of preference but a reflection of a domestic market under siege.

Industry leaders point to a "perfect storm" of challenges. Beyond the lingering effects of the pandemic, Indonesian spinners are being crushed by an influx of cheap imported fabrics and yarns. There are widespread concerns regarding unfair trade practices, including alleged dumping, which allows foreign products to undercut local prices. This has left the domestic market—once the backbone of the national textile industry—flooded with external goods, forcing local mills to scale back production and freeze raw material procurement.

The implications of this industrial stagnation extend beyond factory floors to the halls of international diplomacy. Indonesia’s bargaining power in trade negotiations with Washington is inherently tied to its ability to consume American raw materials. While the government hopes that a "cotton-for-tariffs" deal could make Indonesian exports more competitive in the U.S., Redma emphasizes that without fixing the domestic ecosystem first, the deal remains a paper tiger. "We certainly hope the U.S. will provide tariff relief so our exports can compete again, but that is difficult without improvements on the industrial side," he noted.

Ultimately, the path toward a renewed textile partnership with the U.S. must begin at home. Experts argue that unless the Indonesian government implements stricter import controls and provides better protection for the domestic market, utilization rates will remain stagnant. Until the hum of spinning machines returns to full volume in Indonesian factories, the dream of a "White Gold" bridge between the two nations will likely remain on hold, tethered by the weight of an industry fighting for its life.