Trump administration announces trade pact with Indonesia

The Trump administration finalized a trade agreement Feb. 19 with Indonesia that will provide Americans with market access and opportunities for America’s manufacturing, agriculture, and digital sectors.

President Donald J. Trump and Indonesian President Prabowo Subianto also signed a document confirming their commitment to implementing this agreement, according to a release posted on WhiteHouse.gov.

Key terms of the U.S.-Indonesia Agreement on Reciprocal Trade include:

• Indonesia will eliminate tariff barriers on more than 99% of U.S. 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 and prevent barriers to U.S. 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.
• The U.S. and Indonesia said the deals will mean about $33 billion worth of investment in agriculture, aerospace, and energy in the U.S. further increasing U.S. exports to Indonesia. This includes purchases of approximately $15 billion of U.S. energy commodities; procurement of commercial aircraft and aviation-related goods and services of approximately $13.5 billion, including from Boeing; and purchases of more than $4.5 billion of U.S. agricultural products.

U.S. Meat Export Federation President and CEO Dan Halstrom praised the Trump administration for its continued focus on breaking down barriers for U.S. agricultural exports and looked forward to successful implementation of the U.S.-Indonesia agreement.

Indonesia has been a leading priority for the U.S. red meat industry throughout recent negotiations on reciprocal trade, he said, adding that without access to China, the U.S. beef industry needs to be able to serve the Indonesian market, which demands similar items as China and other Asian destinations.

“Currently, Indonesia is essentially closed to U.S. beef due to its trade-limiting import licensing system and effective cap on imports,” Halstrom said. “The new agreement addresses the many barriers maintained by Indonesia, and successful implementation will allow Indonesian importers and consumers to have meaningful, consistent access to U.S. beef for the first time.”

The agreement also includes a 50,000 metric ton annual purchase commitment. This is in line with USMEF’s market potential estimates and should help incentivize true implementation of the commitments Indonesia has made on removing its non-tariff barriers, Halstrom said. Export value could reach $400 million to $500 million in the near term, following implementation.

Also, exports of U.S. pork have also been restricted by Indonesia’s import licensing regime and by limited approval of U.S. plants, he said. These obstacles end under this agreement, enabling further growth in U.S. pork exports, including further processed products.

Growth Energy, the nation’s largest biofuel trade association, said in praising the pact, according to United States Trade Representative Jamieson Greer, that it will open “commercially meaningful opportunities for American farmers and manufacturers.”

As part of the deal, Indonesia has agreed to lift its 30% tariff on U.S. ethanol exports, remove measures preventing the import of U.S. ethanol, and adopt transportation fuels mixed with up to five percent ethanol (E5) by 2028 and up to 10% ethanol (E10) by 2030. Longer-term, Indonesia aims to incorporate 20% ethanol (E20) into its fuel mix. 

“On the heels of a similar agreement with Guatemala, the new trade framework with Indonesia represents a renewed hope for American agriculture,” said Growth Energy CEO Emily Skor. “Indonesia is the world’s fourth most populous country, and its adoption of 10% ethanol blends nationwide could open a 900 million-gallon market to American producers and farmers.”

In the coming weeks, the two countries will undertake applicable domestic procedures to make the agreement effective, according to WhiteHouse.gov.

The U.S. will maintain a 19% reciprocal tariff rate for imports from Indonesia, except for certain identified products which will receive a 0% reciprocal tariff rate. The U.S. committed to establish 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 U.S.

The U.S. currently runs its 15th largest goods trade deficit with Indonesia. The U.S. total goods trade deficit with Indonesia was $23.7 billion in 2025. Before this deal, Indonesia’s simple average applied tariff was 8% while the U.S. average applied tariff was 3.3%.

Dave Bergmeier can be reached at 620-227-1822 or [email protected].