US and Indonesia agree on trade terms including labour and supply chain commitments

The new trade agreement between the two countries will see the removal of tariff barriers on over 99% of US exports, as well as maintaining a 19% reciprocal tariff on most Indonesian imports, with selected products eligible for a 0% tariff.

The United States will maintain a 19% reciprocal tariff rate for imports from Indonesia, except for certain identified products which will receive a 0% reciprocal tariff rate, stated the White House on 19 February 2026.

US President Donald Trump and Indonesian President Prabowo Subianto confirmed their commitment to implementing this agreement through the signing of the US-Indonesia Agreement on Reciprocal Trade. 

The White House noted that in the coming weeks, the US and Indonesia will undertake applicable domestic procedures to make the Agreement effective, including maintaining the 19% reciprocal tariff rate for imports from Indonesia, except for certain identified products which will receive a 0% reciprocal tariff rate. To this point, the US committted to establishing a mechanism allowing certain textile and apparel goods from Indonesia to receive a 0% reciprocal tariff rate for a to-be-specified volume of apparel and textile imports.

"This volume will be determined in relation to the quantity of exports of textiles produced from American cotton and man-made fiber textile inputs from the United States," the White House stated. 

The White House added that the US may also consider the effect that the Agreement has on national security, including taking trade action under section 232 of the Trade Expansion Act of 1962, as amended (19 U.S.C. 1862).

Currently, the US runs its 15^th largest goods trade deficit with Indonesia, with US$23.7bn in 2025. Prior to this deal, Indonesia’s simple average applied tariff was 8% while the US average applied tariff was 3.3%. 

Other key terms of the US-Indonesia Agreement on Reciprocal Trade include: 

• Indonesia will eliminate tariff barriers on over 99% of US products exported to Indonesia across all sectors, including for agricultural products, health products, seafood, information and communications technology, automotive products, and chemicals.
• Indonesia will address a range of non-tariff barriers, such as
  • Exempting US companies and originating goods from local content requirements,
  • Accepting US federal motor vehicle safety and emission standards,
  • Accepting FDA standards for medical devices and pharmaceuticals,
  • Removing burdensome certification and labeling requirements,
  • Eliminating pre-shipment requirements, and
  • Taking steps to resolve many long-standing intellectual property issues.
• Indonesia will address and prevent barriers to US agricultural products being sold in the Indonesian market, including by exempting food and agricultural products from all of Indonesia’s import licensing regimes and ensuring transparency and fairness with respect to geographical indications, including meats and cheeses, and more.
• Indonesia has committed to eliminate barriers for digital trade, including
  • Eliminating existing HTS tariff lines on “intangible products”,
  • Supporting a permanent moratorium on customs duties on electronic transmissions at the World Trade Organization immediately and without conditions, and
  • Ensuring a level playing field for US electronic payment service companies.
• Indonesia has committed to join the Global Forum on Steel Excess Capacity and take actions to address global excess capacity in the steel sector and its impacts.
• The US and Indonesia will cooperate to increase supply chain resilience, address duty evasion, and ensure adequate export controls and investment security. Indonesia will remove restrictions on exports to the United States for all industrial commodities, including critical minerals.
• Indonesia has committed to adopt and implement a forced labour import ban and remove provisions from its labour laws that restrict workers and unions from fully exercising freedom of association and collective bargaining rights.
• The United States and Indonesia commend the massive commercial deals reached of approximately US$33bn worth of investment in agriculture, aerospace, and energy in the US – further increasing US exports to Indonesia. This includes:
  • Purchases of approximately US$15bn of US energy commodities.
  • Procurement of commercial aircraft and aviation-related goods and services of approximately US$13.5bn, including from Boeing.
  • Purchases of over US$4.5bn of US agricultural products.

In addition to the signing of the US-Indonesia Agreement on Reciprocal Trade, Freeport-McMoRan signed a Memorandum of Understanding with Indonesia to extend its mining license and expand operations in the Grasberg minerals district. This deal will generate an expected US$10bn in annual revenue and will further strengthen US supply chains for critical minerals.

READ MORE: US strikes tariff deals with the Philippines, Japan, and Indonesia 

Lead image / Indonesian President Prabowo Subianto Facebook