The United States and Indonesia on Thursday, February 19, 2026, signed a comprehensive bilateral trade deal that significantly reduces U.S. tariffs on Indonesian goods and opens Jakarta’s market to billions of dollars in American exports, the White House announced.
Under the agreement, the U.S. will lower tariffs on Indonesian imports from 32% to 19% across a broad range of products. In exchange, Indonesia has committed to eliminating trade barriers on more than 99% of U.S. imports and facilitating over $30 billion in purchases of American goods over the coming years.
The deal was finalized during a high-profile visit to Washington by Indonesian President Prabowo Subianto, who also attended the inaugural meeting of President Donald Trump’s Board of Peace initiative, originally focused on Gaza reconstruction but now expanding to global peacemaking and stabilization efforts.
U.S. Trade Representative Jamieson Greer hailed the pact as a breakthrough that “breaks down trade barriers” and directly advances the economic interests of American workers, farmers, and businesses. “This agreement strengthens our supply chains, supports good-paying jobs here at home, and delivers meaningful market access for U.S. exporters,” Greer said in a statement.
Key provisions of the deal include:
- Tariff reductions and exemptions: The U.S. will apply the lowered 19% tariff rate to a wide array of Indonesian exports. In addition, certain Indonesian clothing and textile products manufactured using U.S.-sourced cotton and synthetic materials will receive full tariff exemptions, incentivizing the use of American inputs in Indonesian production chains.
- Market access for U.S. goods: Indonesia has agreed to remove non-tariff barriers—such as quotas, licensing restrictions, and discriminatory regulations—on more than 99% of American imports. This opens the door for expanded U.S. sales of agricultural products (including soybeans, beef, and corn), healthcare goods and pharmaceuticals, seafood, advanced technology, automotive components, and energy supplies.
- Major purchase commitments: Jakarta has pledged to procure billions of dollars worth of U.S. products, including cotton, soybeans, beef, Boeing aircraft, and energy commodities (such as liquefied natural gas). These purchases are expected to support American farmers, manufacturers, and energy producers.
- Critical minerals cooperation: Indonesia will support U.S. companies in developing its rare earth elements and critical minerals infrastructure. The move is aimed at helping the United States diversify supply chains away from dominant producers like China and secure stable access to materials essential for batteries, electronics, defense systems, and renewable energy technologies.
On Wednesday, ahead of the formal signing, Indonesian and U.S. companies inked a package of commercial agreements valued at $38.4 billion, spanning mining, technology, textiles, infrastructure, and other sectors. These deals are expected to generate significant economic activity and job creation in both countries.
The agreement reflects the Trump administration’s “America First” trade policy, which prioritizes reciprocal market access, reduced barriers for U.S. exporters, and strategic partnerships that enhance economic security. It also aligns with Indonesia’s efforts under President Prabowo to attract foreign investment, modernize its economy, and strengthen ties with the United States amid growing geopolitical competition in the Indo-Pacific.
Indonesia, Southeast Asia’s largest economy and the world’s fourth-most populous nation, is a key U.S. partner in the region. The deal comes as Washington seeks to deepen economic engagement with ASEAN countries to counterbalance China’s influence and secure resilient supply chains.
President Prabowo, who assumed office in October 2024, has prioritized economic diplomacy and foreign investment as pillars of his administration. His visit to Washington—his first major international trip of 2026—underscored Indonesia’s strategic alignment with the United States on trade, security, and critical minerals.
The White House described the pact as a “win-win” that will benefit American exporters, strengthen bilateral ties, and contribute to regional stability. USTR Greer noted that the agreement includes strong labor and environmental provisions consistent with U.S. trade policy standards.
The deal now awaits ratification procedures in both countries. In the United States, it is expected to be implemented through executive action under existing trade authorities, while Indonesia’s parliament will review and approve the necessary domestic legislation.
Analysts view the agreement as a significant step in U.S.-Indonesia economic relations and a potential model for future bilateral deals in Southeast Asia. It also signals the Trump administration’s continued focus on “fair and reciprocal” trade even as broader multilateral negotiations remain stalled.
As the Board of Peace begins its work on global conflict prevention and stabilization, the trade pact demonstrates how economic diplomacy can complement peacemaking efforts in an increasingly interconnected world.
