Indonesia and US Finalize Trade Deal, Cutting Tariffs to 19%

Agreement includes tariff exemptions on certain Indonesian textile and apparel imports made with US materials.

Published on Mar. 1, 2026

Got story updates? Submit your updates here. ›

Indonesia and the United States have finalized a trade agreement that will cut US reciprocal tariffs on Indonesian imports to 19% and exempt certain products from tariffs. The deal will also allow certain textile and apparel imports from Indonesia made with US cotton and man-made fiber to enter tariff-free, while Indonesia agreed to remove tariff barriers on more than 99% of US products.

Why it matters

The trade deal aims to strengthen economic security and promote growth between the two countries, addressing a significant trade deficit that had previously led the US to impose higher tariffs on Indonesian imports.

The details

Under the agreement, the US will allow certain textile and apparel imports from Indonesia made with US cotton and man-made fiber to enter tariff-free. In return, Indonesia agreed to remove tariff barriers on more than 99% of US products, covering sectors like agriculture, health, seafood, tech, automotive, and chemicals. Indonesia also agreed to address non-tariff barriers and accept US standards for various industries.

  • The trade deal was signed during Indonesian President Prabowo Subianto's visit to Washington on February 19, 2026.
  • The US had initially imposed a 32% reciprocal tariff on imports from Indonesia to address a $23.7 billion trade deficit in 2025.

The players

Prabowo Subianto

The President of Indonesia who visited Washington to finalize the trade deal with the US.

Donald Trump

The former US President who had initially imposed a 32% tariff on Indonesian imports to address the trade deficit.

Jamieson Greer

The US Trade Representative who said the deal will give US agricultural and industrial companies access to Indonesia's market of over 280 million people.

Got photos? Submit your photos here. ›

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 (X)

“The deal will give US agricultural and industrial companies access to Indonesia's market of more than 280 million people.”

— Jamieson Greer, US Trade Representative (X)

What’s next

The trade deal is expected to strengthen economic ties between the US and Indonesia, with both countries agreeing to further cooperation in areas like critical minerals, oil field recovery, and computer chips.

The takeaway

This trade agreement represents a significant step forward in US-Indonesia economic relations, addressing long-standing trade imbalances through tariff reductions and expanded market access for American companies in a major emerging market.