U.S. and Indonesia Joint Statement Details Recently Reached Framework on Reciprocal Trade Deal
The Trump Administration, together with the Indonesian government, released the following fact sheet on July 22 regarding the recent framework on a reciprocal trade deal reached between the two countries. The agreement promises to “strengthen our bilateral economic relationship, which will provide both countries’ exporters unprecedented access to each other’s markets.” The agreement was declared to build on the U.S.-Indonesia Trade and Investment Framework Agreement, signed on July 16, 1996.
Here are the key terms of this reciprocal trade agreement:
- Indonesia will eliminate approximately 99 percent of tariff barriers for a full range of U.S. industrial and U.S. food and agricultural products exported to Indonesia.
- The United States will reduce to 19 percent the reciprocal tariffs, as set forth in Executive Order 14257 of April 2, 2025, on originating goods of Indonesia, and may also identify certain commodities that are not naturally available or domestically produced in the United States for a further reduction in the reciprocal tariff rate.
- The United States and Indonesia will negotiate facilitative rules of origin that ensure that the benefits of the agreement accrue primarily to the United States and Indonesia.
- The United States and Indonesia will work together to address Indonesia’s non-tariff barriers that affect bilateral trade and investment in priority areas, including exempting U.S. companies and originating goods from local content requirements; accepting vehicles built to U.S. federal motor vehicle safety and emissions standards; accepting FDA certificates and prior marketing authorizations for medical devices and pharmaceuticals; removing certain labeling requirements; exempting U.S. exports of cosmetics, medical devices, and other manufactured goods from certain requirements; taking steps to resolve many long-standing intellectual property issues identified in USTR’s Special 301 Report; and addressing U.S. concerns with conformity assessment procedures. Indonesia will work to address barriers for U.S. exports, including through the removal of import restrictions or licensing requirements on U.S. remanufactured goods or their parts; the elimination of pre-shipment inspection or verification requirements on imports of U.S. goods; and the adoption and implementation of good regulatory practices.
- The United States and Indonesia have also committed to address and prevent barriers to U.S. food and agricultural products in the Indonesian market, including exempting U.S. food and agricultural products from all import licensing regimes, including commodity balance requirements; ensuring transparency and fairness with respect to geographical indications; providing permanent Fresh Food of Plant Origin (FFPO) designation for all applicable U.S. plant products; and recognizing U.S. regulatory oversight, including listing of all U.S. meat, poultry, and dairy facilities and accepting certificates issued by U.S. regulatory authorities.
- Indonesia has committed to address barriers impacting digital trade, services, and investment. Indonesia will provide certainty regarding the ability to transfer personal data out of its territory to the United States. Indonesia has committed to eliminate existing HTS tariff lines on “intangible products” and suspend related requirements on import declarations; to support a permanent moratorium on customs duties on electronic transmissions at the WTO immediately and without conditions; and to take effective actions to implement the Joint Initiative on Services Domestic Regulation, including submitting its revised Specific Commitments for certification by the World Trade Organization (WTO).
- Indonesia commits to join the Global Forum on Steel Excess Capacity and take effective actions to address global excess capacity in the steel sector and its impacts.
- Indonesia commits to protecting internationally recognized labor rights. Indonesia will, among other commitments, adopt and implement a prohibition on the importation of goods produced by forced or compulsory labor; amend its labor laws to ensure that workers’ rights to freedom of association and collective bargaining are fully protected; and strengthen enforcement of its labor laws.
- Indonesia commits to adopt and maintain high levels of environmental protection and to effectively enforce its environmental laws, including by taking measures to improve forest sector governance and combat trade in illegally harvested forest products; encourage a more resource efficient economy; accept and fully implement the WTO Agreement on Fisheries Subsidies; and combat illegal, unreported, and unregulated fishing and illegal wildlife trade.
- Indonesia will remove restrictions on exports to the United States of industrial commodities, including critical minerals.
- The United States and Indonesia are committed to strengthening economic and national security cooperation to enhance supply chain resilience and innovation through complementary actions to address unfair trade practices of other countries, and through cooperation on export controls, investment security, and combatting duty evasion.
- In addition, the United States and Indonesia take note of the following forthcoming commercial deals between U.S. and Indonesian companies:
- Procurement of aircraft currently valued at 3.2 billion USD.
- Purchase of agriculture products, including soybeans, soybeans meal, wheat, and cotton with an estimated total value of 4.5 billion USD.
- Purchases of energy products, including liquefied petroleum gas, crude oil, and gasoline, with an estimated value of 15 billion USD.
“In the coming weeks, the United States and Indonesia will negotiate and finalize the Agreement on Reciprocal Trade, prepare the Agreement for signature, and undertake domestic formalities in advance of the Agreement entering into force,” the joint statement said.
In addition, at a conclusion of a visit at the White House by Philippine President Ferdinand Marcos on July 22, President Trump announced that his administration reached a trade deal with the Philippines in which the Southeast Asian country agreed to open its market to U.S. goods at zero tariffs. Philippine goods will pay a 19% tariff upon entry into the U.S. market. President Trump congratulated President Marcos, calling him a “tough, negotiator” in a Truth Social post.