Fact Sheet: The United States and Indonesia Reach Historic Trade Deal
The White House, July 22, 2025.
DELIVERING
ON RECIPROCAL TRADE: President Donald J. Trump announced a landmark trade deal
with Indonesia that will provide Americans with market access in Indonesia once
considered impossible and unlock major breakthroughs for America’s
manufacturing, agriculture, and digital sectors.
· Under this deal,
Indonesia will pay the United States a reciprocal tariff rate of 19%.
· The key terms of the
U.S.-Indonesia Agreement on Reciprocal Trade will include:
o Eliminating Tariff
Barriers: Indonesia
will eliminate tariff barriers, on a preferential basis, on over 99% of U.S.
products exported to Indonesia across all sectors, including for all
agricultural products, health products, seafood, information and communications
technology, automotive products, and chemicals, which will create commercially
meaningful market access opportunities for the full range of U.S. exports,
supporting high-quality American jobs.
o Breaking Down
Non-Tariff Barriers for U.S. Industrial Exports: Indonesia will
address a range of non-tariff barriers, including by: (1) exempting U.S.
companies and originating goods from local content requirements; (2) accepting
vehicles built to U.S. federal motor vehicle safety and emissions standards;
(3) accepting FDA certificates and prior marketing authorizations for medical
devices and pharmaceuticals; (4) exempting U.S. exports of cosmetics, medical
devices, and other manufactured goods from burdensome certification and
labeling requirements; (5) removing import restrictions or licensing
requirements on U.S. remanufactured goods and their parts; (6) eliminating
pre-shipment inspection or verification requirements on imports of U.S. goods;
(7) adopting and implementing good regulatory practices; (8) taking steps to
resolve many long-standing intellectual property issues identified in USTR’s
Special 301 Report; and (9) addressing U.S. concerns with conformity assessment
procedures.
o Breaking Down
Non-Tariff Barriers for U.S. Agriculture Exports: Indonesia will
address and prevent barriers to U.S. agricultural products in the Indonesian
market, including by: (1) exempting U.S. food and agricultural products from
all of Indonesia’s import licensing regimes including its commodity balance policy;
(2) ensuring transparency and fairness with respect to geographical indications
(GIs) including meats and cheeses; (3) providing permanent Fresh Food of Plant
Origin (FFPO) designation for all applicable U.S. plant products; and (4)
recognizing U.S. regulatory oversight, including listing of all U.S. meat,
poultry, and dairy facilities and accepting certificates issued by U.S.
regulatory authorities.
o Strengthening Rules of
Origin: The
United States and Indonesia will negotiate facilitative rules of origin that
ensure that the benefits from the agreement accrue to the United States and
Indonesia, not third-countries.
o Removing Barriers for
Digital Trade: The
United States and Indonesia will finalize commitments on digital trade,
services, and investment. Indonesia has committed to eliminate existing HTS
tariff lines on “intangible products” and suspend related requirements on
import declarations; support a permanent moratorium on customs duties on
electronic transmissions at the World Trade Organization (WTO) immediately and
without conditions; and take effective actions to implement the Joint
Initiative on Services Domestic Regulation, including submitting its revised
Specific Commitments for certification by the WTO. Indonesia will provide
certainty regarding the ability to move personal data out of its territory to
the United States through recognition of the United States as a country or
jurisdiction that provides adequate data protection under Indonesia’s law.
American companies have sought these reforms for years.
o Aligning on Economic
Security: Indonesia
has committed to join the Global Forum on Steel Excess Capacity and take
effective actions to address global excess capacity in the steel sector and its
impacts. The United States and Indonesia are committed to strengthening
cooperation to increase supply chain resilience. This includes addressing duty
evasion and cooperating on export controls and investment security. Indonesia
will remove restrictions on exports to the United States for all industrial
commodities, including critical minerals.
o Improving Labor
Standards: Indonesia
has committed to adopt and implement a forced labor import ban and remove
provisions that restrict workers and unions from exercising freedom of
association and collective bargaining rights.
o Notching Commercial
Deals: The
United States and Indonesia take note of commercial deals in the areas of
agriculture, aerospace, and energy, which will further increase U.S. exports to
Indonesia.
· President Trump has delivered a forward-looking and tough trade deal that will benefit American workers, exporters, farmers, and digital innovators—this deal is what winning looks and will feel like for all Americans.
A
DEFINED PATH FORWARD: In the coming weeks, the United States and Indonesia will
memorialize the Agreement on Reciprocal Trade in order to lock in benefits for
American businesses and workers.
· The United States
currently runs its fifteenth largest goods trade deficit with Indonesia.
o The U.S. total goods
trade deficit with Indonesia was $17.9 billion in 2024.
o Before this deal, Indonesia’s simple average applied tariff was 8% while the U.S. average applied tariff was 3.3%.
LIBERATING
AMERICA FROM UNFAIR TRADE PRACTICES: Since Day One, President Trump
challenged the assumption that American workers and businesses must tolerate
unfair trade practices that have disadvantaged them for decades and contributed
to our historic trade deficit.
· On April 2, President
Trump declared a national emergency in response to the large and persistent
U.S. goods trade deficit caused by a lack of reciprocity in our bilateral trade
relationships, unfair tariff and non-tariff barriers, and U.S. trading partners’
economic policies that suppress domestic wages and consumption.
· President Trump
continues to advance the economic and national security interests of the
American people by removing tariff and non-tariff barriers and expanding market
access for American exporters.
· Today’s announcement shows that America can defend its domestic production and strengthen its defense industrial base while obtaining expansive market access with our trading partners.
The
US and Indonesia have finalized a reciprocal trade agreement. The
agreement includes provisions for reduced tariffs and non-tariff barriers for
both countries' exports, with Indonesia agreeing to significant purchases of
U.S. energy and agricultural products, and the US reducing tariffs on
Indonesian goods.
Here's a more detailed breakdown:
Reciprocal Trade Agreement: The deal, announced by President Trump, establishes a framework for reciprocal trade, aiming to lower trade barriers for both US and Indonesian exporters, according to the United States Trade Representative (.gov).
Tariff Reductions: The US will reduce tariffs on Indonesian goods to 19%, while Indonesia will eliminate approximately 99% of tariff barriers for a wide range of US products.
Increased Market Access: The agreement will provide increased market access for US agricultural products, industrial goods, and manufactured goods in Indonesia.
Commodity Purchases: Indonesia has committed to purchasing a substantial amount of US energy products (including liquefied petroleum gas, crude oil, and gasoline) and agricultural products, such as soybeans, soybeans meal, wheat, and cotton.
Non-Tariff Barrier Reductions: Indonesia will address various non-tariff barriers, including local content requirements, vehicle safety standards, and certification processes for medical devices and pharmaceuticals, according to the White House.
Rules of Origin: The two countries will negotiate rules of origin to ensure the benefits of the agreement accrue to them.
Nickel Exports: Indonesia will lift restrictions on nickel exports to the US, which were previously linked to forced labor concerns, according to POLITICO Pro.
The
United States and Indonesia have recently reached a framework for an Agreement
on Reciprocal Trade.
This agreement was announced by President Trump in mid-July 2025. While the
final agreement still needs to be finalized and formalized, the framework
outlines key terms for a new trade relationship between the two
countries.
The
key elements of this framework include:
· Indonesia is expected
to eliminate tariffs and non-tariff barriers on a significant portion of US
industrial and agricultural exports, opening up market access for various
sectors.
· The US plans to
implement a 19% reciprocal tariff on Indonesian imports, a reduction from a
previous proposal, with potential for further reductions on certain goods.
· Indonesia has committed
to addressing non-tariff barriers, such as local content requirements and
recognizing US standards for vehicles and medical devices.
· The framework includes
provisions for digital trade, removing tariffs on intangible digital products
and supporting the WTO moratorium on customs duties for electronic
transmissions.
· Indonesia will implement a ban on forced labor imports and work to improve workers' rights.
The
framework also anticipates commercial agreements between companies from both
countries, including significant purchases of US agricultural products and
investments in US energy and aircraft.
It is important to remember that this is a framework and the specifics are still being finalized. The goal of the deal is to address the trade deficit the US currently has with Indonesia.
Comments
In
2024, the United States had a goods trade deficit with Indonesia of $17.9
billion.
Indonesia's nominal GDP for 2025 is estimated to be around $1.43 trillion USD. In 2025, Indonesia's nominal GDP per capita is estimated to be $5,027/yr USD. Indonesia's estimated population for mid-2025 is 285,721,236.
Norb Leahy, Dunwoody GA Tea Party Leader
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