Prabowo-Trump Agree 19% Trade Tariff for Indonesian Goods Entering the US: What Does the Agreement Contain?
The governments of Indonesia and the United States have agreed to reduce tariffs on Indonesian goods entering the US to 19%, whilst Indonesia will eliminate 99% of tariff barriers on American products.
The agreement was signed by Coordinating Minister for the Economy Airlangga Hartarto and US Trade Representative Jamieson Greer on Friday morning (20 February) Western Indonesian Time, following months of negotiations.
"This agreement will take effect 90 days after the legal process is completed by both parties," said Coordinating Minister Airlangga Hartarto during a press conference broadcast live by the Presidential Secretariat via YouTube on Friday (20 February).
Hartarto added that the agreement would be consulted with the House of Representatives (DPR). Detailed provisions of the agreement were not included in Hartarto's statement or those of related officials.
Under the agreement, Indonesian exports to the US will be subject to a reciprocal tariff of 19%, with the exception of certain products that will receive a 0% reciprocal tariff. The 19% rate is the result of months of negotiation, after Indonesia was initially hit with a 32% tariff imposed by the US.
Key commodities such as palm oil, coffee, and cocoa have been granted tariff exemptions for entry into the US market.
On the other hand, Indonesia will waive import duties on American products under the agreement. Indonesia will eliminate tariff barriers on more than 99% of US products exported to Indonesia across all sectors, including agricultural products, health products, seafood, information and communications technology, automotive products, and chemicals.
In a written statement, the White House said the 19% tariff reduction was accompanied by commitments from the Indonesian government to:
- Purchase US$15 billion worth of American energy commodities
- Purchase US$13.5 billion worth of aircraft-aviation-related goods and services from Boeing
- Purchase US$4.5 billion worth of American agricultural products
The Indonesian government also signed a memorandum of understanding with Freeport-McMoRan to extend mining permits and expand operations at Grasberg, Papua.
Airlangga further stated that the agreement was based on mutual benefit for the peoples of both Indonesia and the United States.
"The philosophy of this agreement is that both sides must win. It must benefit both the Indonesian people and the American people. We want to achieve a golden era for both nations, not just one," Airlangga said.
He explained that the agreement between the two countries was the result of negotiations that began following the announcement of the US reciprocal tariff policy in April 2025. Indonesia reportedly sent four official letters in 2025, and approximately 90% of Indonesia's proposals were accepted by the US.
Hartarto claimed his team made seven visits to Washington and held more than 19 technical meetings with the USTR.
"This agreement differs from other countries' reciprocal trade agreements because the US agreed to remove non-economic clauses such as cooperation on nuclear reactors, defence, and security, so the agreement is purely focused on trade," Airlangga said.
According to Hartarto, under the agreement approximately 1,819 tariff lines for Indonesian products have been granted preferential treatment. These cover agricultural and industrial sectors including palm oil, coffee and cocoa, spices, electronics and semiconductors, and aircraft components. These products will receive tariffs of up to 0% in the US market.
The apparel and textile sectors will also receive 0% tariffs through a tariff-rate quota (TRQ) mechanism.
Hartarto said the scheme would directly benefit approximately 4 million workers and affect more than 20 million Indonesians.
As part of the reciprocal principle, Indonesia will also grant 0% tariffs on a number of American products such as wheat and soybeans. This policy is deemed to maintain the stability of domestic food prices, including raw materials for noodles, tofu, and tempeh, so as not to add to the burden on consumers.
To ensure the agreement operates fairly, Airlangga said both parties have established a Council of Trade and Investment to address any price increases exceeding the agreed terms.
The agreement was signed by Coordinating Minister for the Economy Airlangga Hartarto and US Trade Representative Jamieson Greer on Friday morning (20 February) Western Indonesian Time, following months of negotiations.
"This agreement will take effect 90 days after the legal process is completed by both parties," said Coordinating Minister Airlangga Hartarto during a press conference broadcast live by the Presidential Secretariat via YouTube on Friday (20 February).
Hartarto added that the agreement would be consulted with the House of Representatives (DPR). Detailed provisions of the agreement were not included in Hartarto's statement or those of related officials.
Under the agreement, Indonesian exports to the US will be subject to a reciprocal tariff of 19%, with the exception of certain products that will receive a 0% reciprocal tariff. The 19% rate is the result of months of negotiation, after Indonesia was initially hit with a 32% tariff imposed by the US.
Key commodities such as palm oil, coffee, and cocoa have been granted tariff exemptions for entry into the US market.
On the other hand, Indonesia will waive import duties on American products under the agreement. Indonesia will eliminate tariff barriers on more than 99% of US products exported to Indonesia across all sectors, including agricultural products, health products, seafood, information and communications technology, automotive products, and chemicals.
In a written statement, the White House said the 19% tariff reduction was accompanied by commitments from the Indonesian government to:
- Purchase US$15 billion worth of American energy commodities
- Purchase US$13.5 billion worth of aircraft-aviation-related goods and services from Boeing
- Purchase US$4.5 billion worth of American agricultural products
The Indonesian government also signed a memorandum of understanding with Freeport-McMoRan to extend mining permits and expand operations at Grasberg, Papua.
Airlangga further stated that the agreement was based on mutual benefit for the peoples of both Indonesia and the United States.
"The philosophy of this agreement is that both sides must win. It must benefit both the Indonesian people and the American people. We want to achieve a golden era for both nations, not just one," Airlangga said.
He explained that the agreement between the two countries was the result of negotiations that began following the announcement of the US reciprocal tariff policy in April 2025. Indonesia reportedly sent four official letters in 2025, and approximately 90% of Indonesia's proposals were accepted by the US.
Hartarto claimed his team made seven visits to Washington and held more than 19 technical meetings with the USTR.
"This agreement differs from other countries' reciprocal trade agreements because the US agreed to remove non-economic clauses such as cooperation on nuclear reactors, defence, and security, so the agreement is purely focused on trade," Airlangga said.
According to Hartarto, under the agreement approximately 1,819 tariff lines for Indonesian products have been granted preferential treatment. These cover agricultural and industrial sectors including palm oil, coffee and cocoa, spices, electronics and semiconductors, and aircraft components. These products will receive tariffs of up to 0% in the US market.
The apparel and textile sectors will also receive 0% tariffs through a tariff-rate quota (TRQ) mechanism.
Hartarto said the scheme would directly benefit approximately 4 million workers and affect more than 20 million Indonesians.
As part of the reciprocal principle, Indonesia will also grant 0% tariffs on a number of American products such as wheat and soybeans. This policy is deemed to maintain the stability of domestic food prices, including raw materials for noodles, tofu, and tempeh, so as not to add to the burden on consumers.
To ensure the agreement operates fairly, Airlangga said both parties have established a Council of Trade and Investment to address any price increases exceeding the agreed terms.