WASHINGTON, D.C., USA
In a landmark development for international trade, the United States and Indonesia signed a historic reciprocal trade agreement on Thursday, aimed at significantly expanding bilateral commerce and strengthening economic ties between the two nations. The agreement was finalized in Washington, D.C., with Indonesian President Prabowo Subianto and U.S. President Donald Trump formally endorsing the pact, marking one of the most comprehensive trade deals the two countries have concluded in decades.
The agreement is designed to eliminate tariffs on more than 99 percent of U.S. goods entering Indonesia, opening new markets for American agricultural products, industrial equipment, technology, and manufactured goods. In return, the United States has agreed to maintain a reciprocal average tariff rate of approximately 19 percent on most Indonesian exports, while granting exemptions on certain commodities, including palm oil and textiles under specific quotas. Analysts say these concessions are expected to significantly boost Indonesia’s export economy while providing American businesses with more predictable access to the Southeast Asian market.
Under the terms of the deal, 1,819 Indonesian tariff lines will enter the U.S. market with zero duties, including major exports such as palm oil, coffee, cocoa, rubber, and electronics components. The agreement also addresses longstanding trade barriers, requiring Indonesia to align with U.S. product standards in key sectors, including vehicle safety, pharmaceuticals, and medical devices, while removing restrictive certification and non-tariff barriers that had limited market access in the past.
In addition to tariff reductions, the pact includes substantial investment commitments valued at $33 to $38 billion, encompassing purchases of U.S. aircraft, energy commodities, and technology products, as well as investments in critical minerals and supply chain infrastructure in Indonesia. Officials describe the deal as a strategic partnership that not only boosts bilateral commerce but also reinforces Indonesia’s role as a pivotal economic partner in the Indo-Pacific region.
Both leaders emphasized the mutually beneficial nature of the agreement. President Prabowo highlighted that the deal will expand job opportunities, strengthen industries in Indonesia, and create new avenues for technological collaboration. U.S. officials praised the pact for enhancing market access for American farmers, manufacturers, and service providers, noting that it represents a “new era of economic cooperation” between the two nations.
The agreement will take effect after domestic legal ratification in both countries, with implementation expected in the coming months. Observers predict that this landmark trade deal could serve as a model for future bilateral agreements, strengthening economic ties across the region and setting new standards for reciprocal trade partnerships.
This historic accord underscores the commitment of both countries to deepen economic engagement, streamline trade regulations, and promote mutual prosperity, reflecting a shared vision for long-term collaboration in the global marketplace.
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