The United States and Indonesia have finalized a bilateral trade agreement, according to an announcement from the White House on February 19. The agreement establishes reciprocal tariff rates and addresses non-tariff barriers impacting trade between the two nations.
Trade Agreement Details
Under the terms of the agreement, initially announced in July of last year, the U.S. Will apply a 19% tariff on goods imported from Indonesia. This represents a reduction from potential tariffs of up to 32% previously faced by Indonesia. In exchange, Indonesia has committed to eliminating local content requirements for U.S. Companies and working to remove obstacles to U.S. Agricultural exports.
Alongside the trade agreement, 11 additional agreements, totaling $38.4 billion in value, were signed between Indonesian and U.S. Companies. These deals, facilitated by the US-ASEAN Business Council, span sectors including mining, energy, agribusiness, textiles, furniture, and advanced technology.
Of the $38.4 billion total, $2.5 billion is allocated to agricultural pledges, while $35.9 billion covers industrial sector MoUs, including cooperation on semiconductors and strategic industrial materials. The Indonesian government believes these agreements demonstrate international confidence in the country’s economic prospects and reinforce its role in the Indo-Pacific region.
The Indonesian government has stated it will monitor the implementation of these agreements to ensure benefits to the national economy and continued international collaboration.
Frequently Asked Questions
What is the main outcome of the agreement?
The U.S. And Indonesia have concluded a bilateral trade agreement setting reciprocal tariff rates and addressing non-tariff barriers.
How much investment was pledged during the business summit?
Eleven agreements worth a total of $38.4 billion were signed between Indonesian and U.S. Companies.
Which sectors are covered by the new agreements?
The agreements cover a range of sectors including mining, energy, agribusiness, textiles, furniture manufacturing, and advanced technology.
As the U.S. And Indonesia move forward with implementing these agreements, what impact do you anticipate on global supply chains and international trade?
