Indonesia to sign final US trade deal in January, tariffs fixed at 19%

[JAKARTA] Indonesia is set to sign a trade tariff agreement with the US in January, under which import duties on Indonesian goods entering the US will be set at 19 per cent, falling short of Jakarta’s initial push for zero tariffs.

Speaking at a media briefing via video call, Coordinating Minister for Economic Affairs Airlangga Hartarto said all substantive trade issues between Indonesia and the US have been resolved, clearing the way for both sides to finalise and sign the agreement by the end of January.

He said Indonesia’s negotiating team met US Trade Representative Jamieson Greer in Washington, DC, on Monday (Dec 22) night, with talks now moving into the legal drafting stage.

“The agreement is based on a reciprocal framework that safeguards the interests of both countries,” Airlangga said.

Officials from Indonesia and the US are scheduled to meet again in the second week of January to finalise technical details. Indonesia President Prabowo Subianto and US President Donald Trump are expected to meet in Washington, DC, in January to formally sign the agreement.

South-east Asia’s largest economy was initially hit with a 32 per cent tariff under the so-called “Liberation Day” measures announced in April, but succeeded in negotiating the rate down to 19 per cent by July.

The December agreement is a follow-up to a leaders’ understanding reached on Jul 22, in which tariffs on Indonesian goods were reduced and special rates were applied to key exports, including palm oil, coffee and cocoa.

Indonesian negotiators have explicitly asked for a zero per cent tariff on commodities that the US does not produce domestically. Officials have also pushed for zero or sharply reduced tariffs on some medical supply chain goods and other “strategic” industrial products.

Indonesia has agreed to ease its restrictions so that US companies can access and process some of its critical minerals as part of broader tariff negotiations.

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Earlier this month, Reuters reported that the negotiations had appeared at risk of stalling after the US accused Indonesia of backtracking on earlier commitments.

Jakarta, however, downplayed the tensions, saying the differences reflected normal negotiating dynamics and amounted to little more than the need to “harmonise the language”.

Airlangga also confirmed that no political agreements were discussed alongside the trade deal.

Indonesia is following its South-east Asian neighbours, such as Malaysia and Vietnam, which have already reached trade tariff agreements with the US. In contrast, Thailand’s negotiations remain on hold due to ongoing domestic political uncertainty.