Jakarta. Indonesia has secured a major trade breakthrough with the United States, reducing import tariffs on Indonesian goods to 19 percent from 32 percent in a move expected to strengthen the competitiveness of the country’s labor-intensive industries in the American market.

The tariff reduction was finalized following direct discussions between President Prabowo Subianto and US President Donald Trump, marking a significant step for Indonesia amid growing global trade competition. The new tariff rate is the lowest among several countries in the region and positions Indonesia as the first to finalize a deal with the US after Trump’s July 7 policy announcement on trade adjustments.

“This agreement offers certainty for businesses and opens wider market access for Indonesian export products while enhancing the country's position in global trade,” Chief Economic Affairs Minister Airlangga Hartarto said in a statement on Friday.

Negotiations began in April, with Indonesia’s trade team, led by Airlangga Hartarto, traveling to Washington for talks with US officials. The move has been praised by industry stakeholders, who see it as a strategic win to strengthen the competitiveness of sectors such as garments and footwear, which are among Indonesia’s top exports to the United States.

“With this lower tariff, labor-intensive industries will have a better chance to compete in the US market compared to other countries, allowing Indonesia to secure additional market share,” the government noted.

The deal is also expected to support job creation, encourage industrial relocation to Indonesia, and attract further investment into the country. The United States remains Indonesia’s second-largest export destination after China, and the lower tariff rates are viewed as a protective measure against market decline and potential mass layoffs within key manufacturing sectors.

Beyond garments and footwear, the tariff reduction is likely to benefit other Indonesian export commodities, including palm oil, as the government seeks to balance trade with the United States while maintaining opportunities for American exports to Indonesia. Key US exports to Indonesia include energy products, agricultural goods, machinery, and aircraft.

President Prabowo has emphasized the need to strengthen domestic supply chains as part of Indonesia’s broader economic transformation. The new trade arrangement with the US aligns with these goals, providing additional support for Indonesia’s industrial base while enhancing its participation in the global market.

Indonesia’s government remains committed to expanding market access for domestic products through continuous international negotiations and cooperation, aiming to combine lower export tariffs with broader trade agreements to drive economic growth and strengthen the country’s global trade footprint.

Add as a preferred source on Google +