The President of the United States, Donald Trump, has announced the framework of a reciprocal trade agreement between the United States and Indonesia. The joint statement titled Framework for United States-Indonesia Agreement on Reciprocal Trade was released by the White House on Tuesday, July 22, 2025, local time.
According to the document, the agreement aims to expand market access for exporters from both countries and strengthen bilateral economic relations. 'The United States and the Republic of Indonesia have agreed to a framework for negotiations of a Reciprocal Trade Agreement that will provide unprecedented market access for the exporters of both countries,' according to the White House's official statement.
The White House also emphasized that in the coming weeks, the United States and Indonesia will finalize the agreement, prepare documents for signing, and complete domestic processes before the agreement comes into effect.
Here are the 12 main points outlined in the agreement framework:
1. Tariff Elimination by Indonesia
Indonesia will eliminate approximately 99 percent of tariffs on industrial, food, and agricultural products from the United States.
2. Reciprocal US Tariffs
The US will impose a 19 percent tariff on products from Indonesia, as stipulated in Executive Order 14257 dated April 2, 2025. Certain specific commodities may be subject to lower tariffs.
3. Rules of Origin
Both countries will establish rules of origin so that the benefits of the agreement only apply to products from the US and Indonesia.
4. Non-Tariff Barrier Elimination
Indonesia will eliminate local content requirements, accept vehicle standards and FDA certificates (US Food and Drug Administration), reduce labeling and inspection regulations, and resolve intellectual property issues.
5. Steel Capacity Handling
Indonesia will join the Global Forum on Steel Excess Capacity (GFSEC) to address global steel overcapacity issues in order to reduce the negative impact of excess steel supply in the global market.
6. Food and Agricultural Products
Indonesia is committed to removing import licensing requirements for food and agricultural products from the US, establishing permanent status for certain plant-based products, recognizing certificates from US regulatory authorities for meat, poultry, and dairy commodities, and establishing permanent status for Fresh Food of Plant Origin (FFPO).
7. Digital Trade and Services
Indonesia will allow the transfer of personal data to the US, eliminate tariffs on digital products, support a moratorium on electronic transmission duties at the World Trade Organization (WTO), and remove tariffs and declarations for intangible products.
8. Labor Rights
Indonesia will prohibit the import of goods produced by forced labor, improve protection of union rights, and strengthen labor law enforcement.
9. Environmental Protection
Indonesia is committed to improving forest governance, prohibiting illegal timber trade, implementing WTO fisheries subsidies, and combating illegal fishing and wildlife trade.
10. Industrial Commodities Export
Indonesia will lift export restrictions on industrial commodities to the US, including vital minerals.
11. Security and Supply Chain
Both countries agree to cooperate on supply chain security, investment, and exports, including countering unfair trade practices.
12. Commercial Transactions
There will be purchases of aircraft worth US$3.2 billion, agricultural products worth US$4.5 billion, and energy worth US$15 billion between US and Indonesian companies.
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