Jakarta. The US has agreed to keep its tariff on Indonesian goods at 19%, but will drop the rate to 0% on Jakarta’s textiles via a quota system in the freshly signed deal.

After almost a year of negotiations, Indonesia finally sealed a reciprocal trade agreement during President Prabowo Subianto’s visit to Washington. The Donald Trump 2.0 administration has previously agreed to cut down its reciprocal tariffs on Indonesia from 32% to 19%. Prior to the signing, Jakarta had announced certain commodities, such as palm oil and coffee, could enter the American market tariff-free. Senior economic minister Airlangga Hartarto later revealed that the list of products that would get 0% tariff had expanded with textiles and apparel, although a tariff rate quota scheme would apply. In other words, Washington will only allow a pre-determined quantity of textiles to be imported at 0%.

“The 0% tariff rate quota on textiles and apparel will benefit 4 million workers in this sector,” Airlangga said at a virtual press briefing from Washington on Thursday night local time.

“If we count their family members, this will certainly affect 20 million Indonesians.”

The signed document wrote that the quota would hinge on how much of the exports were made from American cotton and man-made fiber textile inputs. The agreement also binds Indonesia to facilitate commercial arrangements to import at least 163,000 metric tons of American cotton annually for five years. Southeast Asia’s biggest economy has to keep the annual US cotton imports still exceeding 150,000 tons afterwards.

Under the deal, Indonesia will eliminate tariff barriers on over 99% of US products.

Commenting on these changes, the Indonesian Garment and Textile Industry Association (AGTI) said that the government had already “given its best effort” in the negotiations.

“The reciprocal tariff all started because of Washington’s deficit with us. If we can source American raw materials and export high-value-added goods at zero tariffs, this benefits both countries,” AGTI chairwoman Anne Patricia Sutanto told the Jakarta Globe.

“This supply chain alignment can strengthen the global supply chain [with] made-in-Indonesia manufacturing.”

Just a day earlier, an Indonesian-US business forum resulted in US cotton purchase commitments worth up to $244 million, according to a separate press release. The US National Cotton Council had struck memoranda of understanding with the Indonesia-based Busana Apparel Group and Daehan Global that day. AGTI, Indonesian garment exporter Pan Brothers, and textile recycling startup Ravel also signed an MoU.

Trade Ministry data showed Indonesian exports of US-bound knitted apparel totaled $2.8 billion in 2025, while the non-knitted shipments reached $2.1 billion.