Indonesia and US Sign USD38.4 Billion Trade and Investment Deals
A number of Indonesian and American companies signed agreements worth USD38.4 billion in Washington. The deals were reached ahead of a meeting between President Prabowo Subianto and US President Donald Trump to sign a final trade pact.
The 11 agreements were signed during a dinner hosted by the US Chamber of Commerce in honour of Prabowo. The partnerships span mining, energy, agribusiness, textiles, furniture and technology sectors.
“We hope to find partners ready to join in our ongoing efforts to modernise and industrialise,” Prabowo said in his address. He added that the agreements form part of the implementing arrangements for the Indonesia-US trade deal to be signed with Trump, and are expected to help narrow Indonesia’s trade surplus with the United States.
“I am very optimistic about the future of our relationship,” he said, as quoted by Reuters on Thursday (19 February).
The USD38.4 billion figure released by the Indonesian government is considerably higher than the more than USD7 billion previously cited in a fact sheet from the US-ASEAN Business Council (USABC). That figure includes plans by Indonesian companies to purchase 1 million metric tonnes of US soybeans, 1.6 million tonnes of maize, and 93,000 tonnes of cotton over an unspecified period.
The USABC also stated that Indonesia would purchase 1 million tonnes of wheat this year and up to 5 million tonnes by 2030.
Among the agreements signed were a memorandum of understanding between Freeport-McMoRan and Indonesia’s Ministry of Investment on critical minerals cooperation, as well as a deal between Pertamina and Halliburton Co for oilfield recovery collaboration.
Freeport-McMoRan chairman Richard Adkerson said the company had also signed a preliminary agreement to extend its mining licence beyond 2041. “This is a resource life extension, and we can’t wait to do delineation drilling to understand the potential of that ore body for decades to come,” he said.
In addition, two semiconductor joint venture agreements were signed — one worth USD4.89 billion between Essence Global Group and an Indonesian partner, and another involving Tynergy Technology Group with no disclosed value.
The USABC estimated the value of Indonesia’s soybean purchases at USD685 million, wheat at USD1.25 billion, cotton at USD122 million, and an additional USD200 million for purchases of shredded second-hand clothing from the US for recycling.
During the 2015–2024 period, Indonesia imported an average of 2.3 million metric tonnes of US soybeans per year, nearly 800,000 tonnes of wheat, approximately 180,000 tonnes of cotton, and fewer than 100,000 tonnes of maize, according to US Census Bureau trade data.
In recent years, Indonesia has imported approximately USD3 billion worth of US agricultural products annually, making it the 11th-largest market for all US agricultural exports.
However, according to Reuters, not all agreements included transaction values, including Indonesia’s purchases of US timber and furniture products. No details were provided regarding a “transnational free trade zone” pact signed between industrial estate developer Galang Bumi Industri and Solanna Group LLC.
Previously in July, Indonesia announced USD34 billion in business deals with the US as part of tariff negotiations, including similar wheat and soybean purchases.
Prabowo arrived in Washington this week to attend Trump’s Board of Peace meeting, with hopes that Indonesia could secure a tariff reduction to 18 per cent from the 19 per cent agreed last year — equivalent to the rate granted to India in early February.
In his remarks, US Deputy Trade Representative Rick Switzer did not mention a final tariff rate for Indonesia, but stated that the Reciprocal Trade Agreement between the two countries “will mean more bilateral trade, more investment, and a deeper and more comprehensive economic, investment and trade relationship.”