White House Releases Framework for U.S.-India (Indonesia) Trade Agreement, Final Negotiations Underway

The White House disclosed in a joint statement on Tuesday afternoon that the United States and Indonesia have reached an agreement on a trade agreement framework, under which Indonesia will eliminate tariffs on most U.S. imported goods.

According to the document referred to as the "Reciprocal Trade Agreement," the tariff on Indonesian imports to the United States will be set at 19%.

Although this tariff rate is higher than the United States’ standard 10% tariff on almost all other countries, it is much lower than the 32% uniform tariff initially set for Indonesian goods in President Trump’s “Liberation Day” tariff plan this April.

The joint statement noted that the United States and Indonesia will "continue negotiations on the Reciprocal Trade Agreement and finalize the details" in the coming weeks.

The statement also said that during this period, the two countries will "make preparations for the signing of the agreement and complete relevant domestic procedures before the agreement enters into force."

The newly announced framework terms are consistent with what Trump first revealed on social media last week. At that time, he stated that after speaking with Indonesian President Prabowo Subianto, a deal had been "finalized" with Indonesia.

The more formal statement on Tuesday indicated that the framework also includes a series of upcoming commercial transactions between the two countries, including an aircraft procurement agreement worth $3.2 billion and an energy product procurement plan of approximately $15 billion.

The framework also mentions that the two countries will address various "non-tariff barriers" and other obstacles faced by the United States in the Indonesian market.

According to data from the U.S. Department of Commerce, Indonesia is one of the United States' top 25 trading partners. In 2024, the trade volume of goods between the two countries exceeded $38 billion, with the U.S. trade deficit with Indonesia reaching $17.9 billion.

U.S. Trade Representative Jamison Greer stated in a statement: "Today's announcement demonstrates that the United States can provide protection for domestic industries while also reaching broad market access agreements with trade partners."

Greer said, "American producers, who have long faced high tariffs and cumbersome requirements, will gain unprecedented access to the Indonesian market, and the digital services industry will also enjoy greater certainty. I would like to thank Indonesia's Coordinating Minister for Economic Affairs, Airlangga Hartarto, for his efforts. We are pleased that we can achieve fair, balanced, and mutually beneficial trade between our two countries."

The agreement has joined the ranks of the few framework trade agreements outlined by the Trump administration, with other such agreements including the UK.

This month, Trump announced that agreements similar to Indonesia's have been reached with Vietnam and the Philippines.

The terms of the agreements described by the White House have yet to be confirmed by the participating countries.

Trump also sent a series of letters to major U.S. trading partners, listing the high tariff rates that would take effect starting August 1.