Indonesia, US Reach Breakthrough on Reciprocal Trade Deal

JAKARTA, Investortrust.id — Indonesia and the United States have agreed on the substantive framework of a Reciprocal Trade Agreement on Monday, Dec 22, 2025 in Washington, a milestone expected to lower trade barriers and secure tariff exemptions for key Indonesian exports.

The agreement followed a formal meeting between Coordinating Minister for Economic Affairs Airlangga Hartarto and United States Trade Representative Ambassador Jamieson Greer, held under a direct mandate from President Prabowo Subianto to accelerate completion of the deal.

Negotiations began in April 2025 after the US announced reciprocal tariffs on what it called Liberation Day, imposing duties that initially reached 32 percent on Indonesian products.

A Joint Statement issued on July 22, 2025 reduced the reciprocal tariff rate for Indonesia to 19 percent, paving the way for intensified talks to finalize the agreement.

“The key is balance. We conveyed the issues that are Indonesia’s main concerns, and we also listened to the views of the United States. We looked for a middle ground,” Airlangga said.

Under the reciprocal trade framework, Indonesia committed to expanding market access for US products, addressing non tariff barriers, strengthening cooperation in digital trade and technology, safeguarding national security interests, and enhancing commercial cooperation.

In return, the United States committed to granting tariff exemptions for Indonesia’s flagship exports that cannot be produced domestically in the US, including palm oil, cocoa, coffee, tea, and other commodities.

Airlangga said both sides pushed to resolve all core and technical issues in the agreement, which will be formally signed by President Prabowo Subianto and President Donald Trump.

“We have held meetings with Ambassador Jamieson Greer, and thank God the discussions went very well, allowing us to reach substantive agreement on the issues contained in the ART document,” Airlangga said.

He described the deal as the culmination of lengthy technical negotiations that have continued since April 2025.

Ambassador Greer welcomed the outcome and praised the commitment of both sides to finalize the agreement despite the Christmas holiday period in the US.

“The result of this meeting is the best Christmas gift, which will bring benefits to both countries,” Greer said.

Following the agreement, technical teams from both countries are scheduled to meet in Washington in the second week of January 2026 to conduct legal scrubbing and final clean up of the document, a process targeted to be completed within one week.

The finalized agreement is expected to be ready by the third week of January 2026.

“It is hoped that before the end of January 2026, President Prabowo Subianto and President Trump can officially sign the ART document at the White House in Washington,” Airlangga said.

The US side is currently coordinating between the Office of the US Trade Representative and the National Security Advisor to determine the most appropriate timing for the leaders’ meeting and signing ceremony.