US and Indonesia Finalize Trade Deal Eliminating Tariffs on Most Goods

Agreement will see Indonesia drop duties on 99% of US products, while US maintains 19% tariffs on most Indonesian goods.

Published on Feb. 28, 2026

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The White House announced a new reciprocal trade agreement with Indonesia that will eliminate duties on 99% of US goods entering the world's most populous Muslim-majority country. In return, the US will maintain 19% tariffs on most Indonesian products, similar to rates imposed on neighboring Cambodia and Malaysia.

Why it matters

This deal represents a significant expansion of trade ties between the US and Indonesia, a key strategic partner in Southeast Asia. It comes as the US seeks to strengthen economic relationships in the region to counter China's growing influence. The agreement is also part of the Trump administration's broader push to renegotiate trade terms that are seen as unfavorable to American interests.

The details

Under the terms of the agreement, Indonesia will eliminate tariffs on nearly all US goods, while the US will keep 19% duties on most Indonesian products. The deal was announced after Indonesian President Prabowo Subianto attended the inaugural meeting of President Trump's Board of Peace, where he committed to sending 8,000 Indonesian troops to help secure the Gaza Strip. Indonesian companies also agreed to purchase significant quantities of US agricultural products like soybeans, corn, cotton, and wheat.

  • The trade agreement was announced on February 20, 2026.
  • President Prabowo attended the Board of Peace meeting on January 22, 2026.

The players

Donald Trump

The 45th President of the United States who negotiated the trade deal with Indonesia.

Prabowo Subianto

The President of Indonesia who agreed to the trade deal that eliminates tariffs on most US goods entering his country.

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What they’re saying

“We have negotiated very intensively over the last few months, and I think we have reached solid understandings on many issues.”

— Prabowo Subianto, President of Indonesia (US Chamber of Commerce)

“President Prabowo of Indonesia, thank you very much. It's a big country you have, and you do a great job.”

— Donald Trump, President of the United States (Board of Peace meeting)

“We are very optimistic with the leadership of President Trump, this vision of real peace will be achieved. There will be problems, but we will prevail.”

— Prabowo Subianto, President of Indonesia (Board of Peace meeting)

What’s next

The details of the agreement on critical minerals cooperation between the US and Indonesia are still to be finalized.

The takeaway

This trade deal represents a significant deepening of economic ties between the US and Indonesia, a key regional power in Southeast Asia. It is part of the Trump administration's broader strategy to renegotiate trade terms and strengthen alliances to counter China's growing influence in the region.