US and Indonesia Agree to Slash Tariffs to 19% in Bilateral Trade Deal

The administrations of Donald Trump and Indonesia have reached an agreement to reduce US tariffs on Indonesian goods from 32% to 19%.

As part of the deal, Indonesia will eliminate trade restrictions on over 99% of US exports, covering sectors such as agriculture, healthcare, seafood, technology, and automotive products, the White House announced on Thursday.

In return, Washington will grant exemptions on certain Indonesian products, including some textiles and clothing made with US cotton and synthetic materials.

Jamieson Greer described the deal as a move that “dismantles trade barriers” while supporting American economic interests.

The agreement was finalized during a visit by Prabowo Subianto to Washington, where he attended the inaugural session of the Trump-led “Board of Peace” focused on Gaza’s reconstruction.

Airlangga Hartarto, Indonesia’s coordinating minister for economic affairs, said the deal benefits both nations and is expected to attract more investment into Indonesia. According to him, around 90% of Indonesia’s tariff requests were accepted by the US.

“The goal of this agreement is shared economic growth, resilient supply chains, and mutual respect for sovereignty,” he told reporters in Washington.

Under the arrangement, Indonesia will receive exemptions for more than 1,700 products, including coffee, spices, chocolate, natural rubber, and palm oil, the country’s leading export. In exchange, Indonesia will adopt US standards on car safety, emissions, medical devices, and pharmaceuticals, easing market access for American goods, according to the White House.

The agreement also includes collaboration on Indonesia’s rare earth infrastructure, which will support US access to critical minerals.

The new terms will come into effect within 90 days, with potential revisions allowed if both sides consent.

On Wednesday, companies from both nations signed deals worth $38.4bn (£28.6bn), spanning mining, technology, textiles, and other sectors. Prabowo Subianto noted that these agreements, part of the tariff deal, aim to help Indonesia reduce its trade surplus with the US, adding, “I am very optimistic about the future of our relationship,” at a dinner hosted by the US Chamber of Commerce.