Indonesia secures 19% US tariff deal as Prabowo and Trump announce $38.4 billion agreements
Indonesia and the United States have signed a reciprocal trade agreement that sets a permanent 19% tariff for Indonesian exports to the U.S. and outlines broader economic and security cooperation.
The agreement was finalised during President Prabowo Subianto’s visit to Washington. It maintains a 19% tariff rate on Indonesian goods, reduced from the initial 32% proposed last year.
Indonesia’s Coordinating Minister for Economic Affairs, Airlangga Hartarto, described the deal as a ”‘win-win’ for both countries” that “respects the sovereignty of both countries.”
Under the agreement, several Indonesian exports, including coffee, chocolate, natural rubber, and spices, will enter the U.S. market tariff-free.
Indonesia is also seeking exemptions for an additional 1,700 commodities, including palm oil. In return, Indonesia will remove tariff barriers on most U.S. products and align its domestic standards with U.S. regulations covering vehicle safety, emissions, pharmaceuticals, and medical devices.
President Prabowo and U.S. President Donald Trump also signed a document titled “Implementation of the Agreement Toward a NEW GOLDEN AGE for the US-Indonesian Alliance.” The framework follows the signing of private-sector and government agreements earlier in the week, valued at US$38.4 billion.
“We have been negotiating very intensively over the past few months, and I believe we have reached a solid agreement on many issues,” President Prabowo said during a meeting with business leaders.
The visit also included discussions on security cooperation. At the inaugural meeting of the Board of Peace (BoP), President Prabowo pledged up to 8,000 troops to support an International Stabilisation Force for Gaza.
“We are fully committed to this plan and that is why we joined the Board of Peace,” Prabowo said. He added, “We know there will be a lot of obstacles… but we are very optimistic with the leadership of President Trump, this vision of real peace will be achieved.”
The Indonesian military has indicated that an advance team of 1,000 personnel could be ready by April, with the full contingent prepared by June.
The trade agreement will take effect 90 days after both countries complete the required legal procedures. Indonesia will also facilitate U.S. investment in critical minerals and energy resources under terms similar to those offered to domestic investors.
This story is written and edited by the Global South World team, you can contact us here.
