U.S. And Indonesia Forge “Latest Golden Age” with Landmark Trade Deal

Washington D.C. – A reciprocal trade agreement between the United States and Indonesia was finalized on February 19, 2026, signaling a strengthened alliance and opening new economic opportunities for both nations. The agreement, signed by U.S. President Donald J. Trump and Indonesian President Prabowo Subianto, aims to boost trade, investment, and economic growth, with a focus on key sectors like agriculture, manufacturing, and digital technology.

Key Provisions of the Agreement

The U.S.-Indonesia Agreement on Reciprocal Trade includes several key provisions designed to reduce trade barriers and promote economic cooperation:

• Tariff Elimination: Indonesia will eliminate tariff barriers on over 99% of U.S. Products exported to Indonesia, encompassing agricultural goods, health products, seafood, information and communications technology, automotive products, and chemicals.
• Non-Tariff Barrier Reduction: Indonesia will address non-tariff barriers, including removing local content requirements for U.S. Companies, accepting U.S. Federal motor vehicle safety and emission standards, and aligning with FDA standards for medical devices and pharmaceuticals.
• Agricultural Market Access: Indonesia will eliminate import licensing regimes for U.S. Food and agricultural products and ensure transparency in geographical indications for products like meats and cheeses.
• Digital Trade Facilitation: Indonesia has committed to eliminating tariffs on “intangible products” and supporting a permanent moratorium on customs duties on electronic transmissions at the World Trade Organization.
• Supply Chain Resilience: The two countries will collaborate to enhance supply chain resilience, address duty evasion, and ensure investment security. Indonesia will likewise remove restrictions on exports of critical minerals to the United States.
• Labor Standards: Indonesia has committed to adopting a forced labor import ban and removing restrictions on workers’ and unions’ rights to freedom of association and collective bargaining.

Significant Commercial Deals

Alongside the trade agreement, U.S. And Indonesian companies announced approximately $38.4 billion in commercial deals, further solidifying economic ties. These deals include:

• Approximately $15 billion in purchases of U.S. Energy commodities.
• Procurement of commercial aircraft and aviation-related goods and services worth approximately $13.5 billion, including from Boeing.
• Purchases exceeding $4.5 billion of U.S. Agricultural products, including soybeans, corn, cotton, and wheat.
• A Memorandum of Understanding between Freeport-McMoRan and Indonesia to extend its mining license and expand operations at the Grasberg minerals district, expected to generate $10 billion in annual revenue.

Reciprocal Tariff Rates

The United States will maintain a 19% reciprocal tariff rate for most imports from Indonesia. However, certain identified products will receive a 0% reciprocal tariff rate. A mechanism will be established to allow certain textile and apparel goods from Indonesia to enter the U.S. At a 0% tariff rate, contingent on the volume of exports of textiles produced from American cotton and man-made fiber textile inputs.

Board of Peace Summit and Strategic Alignment

The signing of the trade agreement coincided with the inaugural meeting of President Trump’s Board of Peace in Washington, D.C., on February 19, 2026. President Subianto attended the summit, alongside leaders from Albania, Argentina, Armenia, Azerbaijan, Bahrain, Egypt, Hungary, Kazakhstan, Pakistan, Paraguay, Qatar, Saudi Arabia, Turkey, Uzbekistan, Vietnam, and others. During the summit, President Trump praised President Subianto as “tough” and “smart,” highlighting Indonesia’s commitment to sending troops to Gaza to help maintain peace Tempo.co.

Addressing Trade Deficits and Unfair Practices

The Trump administration has emphasized the need to address trade imbalances and unfair trade practices. The U.S. Currently runs a $23.7 billion goods trade deficit with Indonesia The White House. Prior to the agreement, Indonesia’s average applied tariff was 8%, while the U.S. Average was 3.3%.

Looking Ahead

Both the United States and Indonesia are undertaking domestic procedures to implement the agreement. This landmark trade deal is expected to usher in a “New Golden Age” for the U.S.-Indonesian alliance, fostering economic prosperity and strengthening strategic ties between the two nations AP News.