20.02.202604:00:22UTC+00Indonesia, U.S. Ink Trade Deal With Lower Tariffs

Indonesia and the United States have concluded a reciprocal trade agreement under which Washington will cap tariffs on Indonesian exports at 19%, significantly below the 32% rate it had proposed last year. The deal, finalized after months of negotiations between Coordinating Economic Minister Airlangga Hartarto and U.S. Trade Representative Jamieson Greer, provides duty-free access for Indonesian coffee, cocoa products, natural rubber, and spices, and opens the door to potential tariff exemptions for nearly 1,700 additional products, including palm oil.

Textile exports will face a 0% duty under an upcoming Tariff-Rate Quota (TRQ) scheme. Airlangga stated that the United States ultimately dropped non-economic conditions related to nuclear development and the South China Sea, while the agreement specifically bars the transshipment of Chinese goods through Indonesia.

In exchange, Indonesia will substantially reduce or remove most tariff and non-tariff barriers on U.S. exports, adopt U.S. standards for motor vehicles and medical products, and streamline access for American investment in critical minerals and the energy sector.