Trade Breakthrough: US and Indonesia Cut Tariffs to 19%
The US and Indonesia finalize a tariff reduction deal, cutting rates to 19% and unlocking $30B in trade, boosting supply chains and investment.
President Donald Trump's administration and the Indonesian government say they have finalized an agreement to reduce US tariffs on the Southeast Asian country from 32% to 19%.
The White House said on Thursday that under the deal, Indonesia will reduce trade barriers on more than 99% of US imports and facilitate the purchase of more than $30 billion (£22.3 billion) worth of American goods.
Washington said it had exempted tariffs on some Indonesian goods, including some clothing and textiles made from cotton and man-made materials from the US.
US Trade Representative Jamieson Greer said the agreement would "break down trade barriers" and advance the interests of the American people.
The agreement came during a visit by Indonesian President Prabowo Subianto to Washington to attend the first meeting of the Trump-led "Board of Peace" to discuss the reconstruction of Gaza.
Indonesia's Coordinating Minister for Economic Affairs, Airlangga Hartart, said the finalized deal is beneficial for both parties and will attract more investment to Indonesia.
Airlangga said the US has accepted approximately 90% of Indonesia's requests on tariff conditions.
He told reporters in Washington, "The vision of this agreement is mutual economic prosperity, strong supply chains, and respect for each country's sovereignty."
Airlangga said that as part of the deal, Indonesia has received tariff exemptions on more than 1,700 items, including coffee, spices, chocolate, natural rubber, and especially its top export product, palm oil.
The White House said this is in exchange for Indonesia opening its market to American products, such as accepting US standards on car safety, emissions, medical devices, and pharmaceuticals.
Indonesia will remove trade barriers on American imports, including agricultural, healthcare, seafood, technology, and car-related products.
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It has also pledged to purchase billions of dollars worth of US goods, including cotton, soy, beef, Boeing jets, and energy.
Indonesia will help US companies develop the Southeast Asian country's rare earth infrastructure, helping Washington increase supplies of the essential mineral.
Airlangga said the deal will come into effect in 90 days, and the terms can be changed if both countries agree.
On Wednesday, Indonesian and US companies signed several deals worth $38.4 billion for partnerships in mining, technology, textiles, and other industries.
Prabowo said these deals were part of the tariff agreement and would help Indonesia reduce its trade surplus with the US.
"I'm very optimistic about the future of our relationship," he said Wednesday during a dinner hosted by the US Chamber of Commerce.
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