The U.S. and Indonesia agreed to the framework of a trade agreement which would see Jakarta scrap most of its tariffs on American imports, the White House revealed in a joint statement Tuesday afternoon.
U.S. tariffs on Indonesian imports would be set at 19% under the deal, which is described in the release as an “Agreement on Reciprocal Trade.”
While higher than the 10% baseline tariff that the U.S. has slapped on almost all other countries, the 19% rate is significantly lower than the 32% blanket duty that Indonesia initially faced under President Donald Trump’s “liberation day” tariff plan in April.
The joint statement notes that the U.S. and Indonesia will continue to “negotiate and finalize the Agreement on Reciprocal Trade” in the coming weeks.
A worker processes soybeans to make tofu at a traditional tofu factory in Solo, Central Java, Indonesia, on May 1, 2025.
Agoes Rudianto | Nurphoto | Getty Images
They will also “prepare the Agreement for signature, and undertake domestic formalities in advance of the Agreement entering into force” in that time, the statement said.
The newly unveiled terms of the framework mirror the ones Trump laid out when he first announced on social media last week that he had “finalized” a deal with Indonesia after speaking to its president, Prabowo Subianto.
Tuesday’s more formal statement said the framework also includes a series of forthcoming commercial deals between the two countries, including an aircraft purchase valued at $3.2 billion and an estimated $15 billion in purchases of energy products.
The framework also says the countries will also address various “non-tariff barriers” and other obstacles that the U.S. faces in Indonesian markets.
Indonesia is one of the United States’ top 25 trade partners, with the two countries trading more than $38 billion in goods in 2024, according to the Commerce Department. The U.S. trade deficit with Indonesia totaled $17.9 billion last year.
“Today’s announcement shows that America can defend its domestic production while obtaining expansive market access with our trading partners,” U.S. Trade Representative Jamieson Greer said in a statement.
“American producers, who have long-faced high tariffs and burdensome requirements, will receive unprecedented access to Indonesia’s market and greater certainty for the digital services sector. I thank Indonesian Minister Airlangga Hartarto for his dedication and I am glad we are able to achieve fair, balanced, and reciprocal trade for our countries,” said Greer.
The deal joins a limited number of other framework trade agreement outlines the Trump administration has released with countries that include the United Kingdom and China.
This month, Trump announced that deals similar to Indonesia’s had been reached with Vietnam and the Philippines.
But the terms of those deals, as described by the White House, have not been confirmed by the participating nations.
Trump has also sent a series of letters to key U.S. trade partners, laying out steep tariff rates he says will be imposed starting Aug. 1.
