U.S. And Indonesia Finalize Bilateral Trade Agreement, Announce $38.4 Billion in Investment
The United States and Indonesia have officially concluded a bilateral trade agreement, setting reciprocal tariff rates and addressing non-tariff barriers on goods traded between the two countries. The announcement, made by the White House on February 19, 2026, builds upon an initial agreement reached in July of the previous year.
Key Terms of the Agreement
Under the finalized agreement, the U.S. Will impose a 19% tariff on goods imported from Indonesia, a reduction from potential tariffs of up to 32%. In return, Indonesia has committed to eliminating local content requirements for U.S. Companies and addressing barriers impacting U.S. Agricultural exports.
$38.4 Billion in Investment Pledges
The trade agreement was accompanied by the announcement of $38.4 billion in investment pledges between Indonesian and U.S. Companies, formalized on February 18, 2026. Indonesian President Prabowo Subianto witnessed the signing of 11 agreements at a business summit in Washington D.C.
Sector Breakdown of Investments
The investment deals, hosted by the US-ASEAN Business Council, span several key sectors, including:
- Mining and downstream processing
- Energy
- Agribusiness
- Textiles and garments
- Furniture manufacturing
- Advanced technology
Of the total investment, $2.5 billion is allocated to the agricultural sector, whereas $35.9 billion is directed towards industrial projects, including cooperation on semiconductors and strategic industrial materials.
Indonesia’s Strategic Position
The Indonesian government views these agreements as a demonstration of international confidence in the country’s economic future and a strengthening of its position as a strategic partner in the Indo-Pacific region. The government will monitor the implementation of these agreements to ensure they benefit the national economy and foster international collaboration.