Indonesia secured major tariff reduction and commodity exemptions in bilateral agreement with Washington, marking a significant shift in US-Indonesia economic relations amid growing focus on critical minerals and supply chain security.
Indonesia and the US have finalised a trade agreement on 19 February 2026 that reduces US tariffs on Indonesian goods from 32% to 19%, with key exemptions secured for Indonesia’s major exports.
The deal was signed in Washington by Indonesia’s senior economic minister, Airlangga Hartarto, and US Trade Representative, Jamieson Greer, following months of negotiations. The United States Trade Representative also released a fact sheet on the trade deal.
The 19% tariff rate matches agreements the US has established with other Southeast Asian countries, including Malaysia, Cambodia, Thailand, and the Philippines.
Palm oil, which represents approximately 9% of Indonesia’s total exports, received a crucial tariff exemption. Indonesian coffee, cocoa, rubber, and spices will also enter the US duty-free.
Indonesia agreed to eliminate tariff barriers on most US products and address non-tariff obstacles such as local content requirements. The country will also adopt US product standards for vehicle safety, emissions, medical devices, and pharmaceuticals.
The agreement includes provisions addressing critical minerals, with Indonesia imposing restrictions on excess production by foreign-owned mineral processing facilities for nickel, cobalt, bauxite, copper, and manganese. Indonesia also agreed to facilitate US investment in the development of critical minerals and rare-earth sectors.
The agreement will take effect 90 days after both countries complete necessary legal procedures.
