Washington: The US and Indonesia have finalized a trade agreement that reduces US tariffs on Indonesian goods to 19% from the previous rate of 32%. This development was announced by the White House, marking a significant step in economic relations between the two nations.

According to Anadolu Agency, the deal includes Indonesia’s commitment to removing trade barriers on more than 99% of US imports and facilitating over $30 billion in purchases of American goods. The US has also agreed to grant tariff exemptions on certain Indonesian exports, particularly clothing and textile products that utilize US-sourced cotton and synthetic materials.

US Trade Representative Jamieson Greer stated that the agreement effectively dismantles trade barriers and serves the interests of the American populace. This milestone comes during Indonesian President Prabowo Subianto’s visit to Washington, where he participated in the first meeting of the Trump-led ‘Board of Peace,’ a group initially focused on Gaza’s reconstruction.

T
he agreement further specifies that Indonesia will eliminate trade barriers on a variety of American imports, including agricultural products, healthcare goods, seafood, technology, and automotive items. Jakarta has also committed to purchasing substantial quantities of US products, such as cotton, soybeans, beef, Boeing aircraft, and energy supplies.

Additionally, Indonesia will assist US companies in developing its rare earths infrastructure, a strategic move to help Washington diversify and bolster its supply of critical minerals. On Wednesday, a series of agreements worth $38.4 billion were signed between Indonesian and US companies, covering sectors such as mining, technology, and textiles.