Indonesia, US Conclude Major Tariff Agreement, Maintain 19 Pct Reciprocal Rate

JAKARTA, Feb 20 (Bernama) -- Indonesia and the United States (US) have concluded a landmark trade agreement under which Washington will maintain a 19 per cent reciprocal tariff rate on Indonesian imports. 

According to the White House, certain identified products from Indonesia will receive a zero per cent reciprocal tariff rate, including selected textile and apparel goods for a to-be-specified import volume.

“This volume will be determined in relation to the quantity of exports of textiles produced from American cotton and man-made fibre textile inputs from the US,” it said in a statement posted on its official website on Friday.

Indonesian President Prabowo Subianto and US President Donald Trump signed a document on Friday, confirming their strong commitment to implementing the agreement.

Under the deal, the White House said Indonesia has agreed to eliminate tariff barriers on over 99 per cent of US exports across all sectors, including agricultural and health products, seafood, ICT goods, automotive products, and chemicals.

The White House said Indonesia would also address and prevent barriers to US agricultural products by exempting food and agricultural goods from all import licensing regimes and ensuring transparency and fairness in geographical indications, including for meats and cheeses.

Both countries will also cooperate to increase supply chain resilience, address duty evasion, and ensure adequate export controls and investment security. 

It said Indonesia has also agreed to remove restrictions on exports to the US for all industrial commodities, including critical minerals.

In addition, Indonesia will address a range of non-tariff barriers by exempting US companies and goods from local content requirements, recognising US federal motor vehicle safety and emission standards, and accepting US Food and Drug Administration standards for medical devices and pharmaceuticals.

Indonesia will also remove burdensome certification and labelling requirements, eliminating pre-shipment requirements, and take steps to resolve longstanding intellectual property issues.

“The US may positively consider the effect that the Agreement has on national security, including taking the Agreement into consideration when taking trade action under section 232 of the Trade Expansion Act of 1962, as amended (19 U.S.C. 1862),” the White House said.

The White House said that both countries also welcomed commercial agreements valued at approximately US$33 billion in agriculture, aerospace, and energy in the US, which are expected to further increase US exports to Indonesia. 

The commitments include purchases of approximately US$15 billion in US energy commodities, procurement of commercial aircraft and aviation-related goods and services worth about US$13.5 billion, including from Boeing, and over US$4.5 billion in US agricultural products.

The US currently runs its 15th-largest goods trade deficit with Indonesia, totalling US$23.7 billion in 2025. 

Before the agreement, Indonesia’s simple average applied tariff stood at eight per cent compared with 3.3 per cent in the US.

-- BERNAMA