US-Indonesia Tariff Deal Cuts Duties to 19%
The administration of Donald Trump and the Indonesian government have finalized a new trade agreement. It will reduce US tariffs on Indonesian goods to 19% from 32%. Officials from both sides confirmed the move on Thursday. They stated that the deal aimed to ease trade tensions while strengthening the supply chains and encouraging cross-border investment.
Under the arrangement, Indonesia will remove trade barriers on more than 99% of American imports. In addition, Jakarta will facilitate purchases of US goods worth over $30bn. Meanwhile, Washington has granted tariff exemptions on select Indonesian exports. It includes certain clothing and textile products which manufactured using cotton and man-made materials that sourced from the United States.
US Trade Representative Jamieson Greer said that the agreement will “breaks down trade barriers” while advancing the interests of the American people. At the same time, Indonesia’s coordinating minister for economic affairs, Airlangga Hartarto, described the pact as beneficial for both economies. He noted that it would attract increased investment into Southeast Asia’s largest economy.
Indonesia Secures Tariff Exemptions, Expands US Market Access in Trade Deal
Airlangga added that approximately 90% of Indonesia’s tariff-related requests were accepted by Washington. “The vision of this agreement is mutual economic prosperity, strong supply chains, and respect for each country’s sovereignty”, he told reporters during his visit to Washington.
As part of the agreement, Indonesia secured tariff exemptions for more than 1,700 goods. These include coffee, spices, chocolate, natural rubber, and its top export, palm oil. However, in return, Indonesia will open its domestic markets to a wider range of American products. For instance, Jakarta has agreed to recognize US standards in sectors such as automobile safety, emissions regulations, medical devices, and pharmaceuticals.
Moreover, Indonesia will lift trade barriers that affect imports across agriculture, healthcare, seafood, technology, and automotive-related industries. It has also committed to purchasing billions of dollars’ worth of US goods. The list includes cotton, soy, beef, energy resources, and aircraft manufactured by Boeing.
US-Indonesia Trade Deal Boosts Rare Earths Cooperation and Investment
The agreement was finalized during a visit to Washington by Indonesian President Prabowo Subianto. He was there to attend the inaugural meeting of the Trump-led “Board of Peace” focused on Gaza’s reconstruction.
In addition, Indonesia has agreed to facilitate American firms in developing its rare earths infrastructure. This cooperation will help Washington expand access to critical minerals that are essential for advanced manufacturing and clean technologies.
Furthermore, companies from both nations have signed the partnership deals worth $38.4bn across mining, textiles, and technology sectors on Wednesday. Prabowo stated that these agreements form part of the broader tariff arrangement and will help to reduce Indonesia’s trade surplus with the United States. “I’m very optimistic about the future of our relationship”, he said at a dinner hosted by the US Chamber of Commerce.
Web Resources on US-Indonesia Tariff Deal
1. Bloomberg.com: Trump, Prabowo Finish Trade Deal Slashing Tariff Rate to 19%
2. CNBC.com: White House releases U.S.-Indonesia trade deal framework
3. TheDiplomat.com: Indonesia Signs Reciprocal Trade Agreement With US, Tariff Set at 19%