How Easing Halal Rules for US Products Affects Indonesian Businesses

2 hours ago 2

February 24, 2026 | 12:52 pm

TEMPO.CO, Jakarta - The reciprocal trade agreement between Indonesia and the United States brings with it the concern about halal certification for American products entering the country. The Dean of the Faculty of Animal Science at Universitas Gadjah Mada (UGM), Budi Guntoro, highlighted the impact of easing halal certification on Indonesia's micro, small, and medium enterprises (MSMEs), as well as the national food sovereignty.

"What is at stake here is not just the [halal] label, but the just competition of halal MSMEs, sovereignty especially in animal-source food, and the consistency of production ethical standards," said Budi, as quoted from UGM's official website, Tuesday, February 24, 2026.

Budi acknowledged that the agreement on reciprocal trade (ART) does not eliminate the national halal regime, as products claimed to be halal must still comply with the Halal Product Assurance (HPA) requirements. Meanwhile, non-halal products are not obliged to obtain halal certification.

Nevertheless, he warned about the possible competition imbalance as domestic businesses still bear the cost and time for halal certification. Meanwhile, imported products that do not claim to be halal could be exempt from similar administrative burdens.

"This asymmetry in compliance costs could create an uneven playing field. MSMEs could lose in terms of price not because of quality, but because of regulations," said Budi, who also serves as the Director of the Assessment Institute for Food, Drugs and Cosmetics (LPPOM) of the Indonesian Ulema Council in Yogyakarta.

Furthermore, Budi argued that the issue becomes more sensitive when it comes to animal-source food as it concerns public health, biosecurity, the welfare of smallholder farmers, and national food sovereignty.

The entry of cheaper imported products is feared to put pressure on the margins of farmers and downstream businesses such as slaughterhouses and meat and milk processors.

Budi also advocated for the implementation of four strategic steps. First, affirmation and subsidies for halal MSMEs so they no longer bear compliance burdens alone. Second, enforcement of label transparency, including non-halal labeling to prevent implicit claims that could mislead consumers.

Third, protection of strategic animal-source food commodities through strict audits and traceability. Fourth, honest public communication that halal is an infrastructure of trust and food ethics.

"Trade is important, but justice, public trust, and food ethics are non-negotiable," said Budi.

Indonesian President Prabowo Subianto and his American counterpart, Donald Trump, officially signed the reciprocal trade agreement in Washington D.C., the United States, on Thursday, February 19, 2026, local time.

The agreement regarding halal certification for American products is outlined in Article 2.9 on Halal for Manufactured Goods and Article 2.22 on Halal for Food and Agricultural Products, in Annex III Specific Commitments, Section 2 Non-Tariff Barriers and Related Matters.

Read: Indonesia: Halal Certification Still Applies to Some U.S. Products

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