The United States and Indonesia have announced a groundbreaking trade agreement that promises to unlock massive volumes of bilateral trade. Indonesia has pledged to eliminate tariffs on 99% of U.S. goods and remove all non-tariff barriers. In return, the U.S. will reduce proposed tariffs on Indonesian imports from 32% to 19%.

This agreement, referred to as a "Reciprocal Trade Agreement", was presented in a joint statement by both countries and confirmed by the White House. President Donald Trump immediately hailed it as a victory for the U.S. economy:

“A huge win for our carmakers, tech companies, farmers, and workers,” he wrote on Truth Social.

📑 What's in the deal?

🔹 Tariff and barrier removal – Indonesia will open its market to virtually all American goods.

🔹 U.S. tariff reduction – New average import duty on Indonesian products will drop to 19%, matching the Philippines' rate.

🔹 Withdrawal of controversial policies – Including plans to tax internet data flows and restrictions on raw material exports.

🔹 $18 billion in trade contracts – $3.2 billion for aircraft purchases and $15 billion for energy deals.

🌍 A massive market for U.S. exporters

Indonesia, the largest economy in Southeast Asia with 280 million citizens, just became even more attractive to U.S. businesses. Last year, the U.S. posted a $17.9 billion trade deficit with Indonesia — but this agreement could reverse that trend.

With the new terms:

🔹 pre-shipment inspections and license requirements will be eliminated,

🔹 refurbished goods from the U.S. will be allowed,

🔹 local content requirements will be lifted,

🔹 and U.S. federal vehicle safety standards will be accepted in Indonesia.

📉 A last-minute deal before tariff hikes?

This is one of the few deals the Trump administration closed before the planned tariff increases set for August 1. Trump has already sent letters to other key trade partners warning that without similar deals, steep tariffs will be imposed.

🔄 Ties to global frameworks

The agreement also commits Indonesia to:

🔹 join the Global Forum on Steel Excess Capacity,

🔹 address global steel oversupply,

🔹 and negotiate rules of origin with the U.S. to ensure benefits are limited to American and Indonesian manufacturers — not third countries like China.


#TRUMP , #Indonesia , #TradeWars , #USPolitics , #worldnews

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