ASIATODAY.ID, WASHINGTON – Indonesian President Prabowo Subianto and U.S. President Donald Trump signed a landmark Reciprocal Trade Agreement (RTA) on Thursday, February 19, 2026, ushering in what both governments describe as a “new golden age” in the US–Indonesia economic alliance.
The agreement, officially titled “Toward a New Golden Age for the US–Indonesia Alliance,” grants zero tariffs on 1,819 Indonesian product categories entering the United States, marking one of the most significant trade breakthroughs between the two nations in decades.
Zero Tariffs on 1,819 Indonesian Export Products
Coordinating Minister for Economic Affairs Airlangga Hartarto confirmed that the agreement covers 1,819 tariff lines spanning agriculture and industrial goods.
Key Indonesian exports benefiting from zero tariffs include: Palm oil, Coffee, Cocoa, Spices, Rubber, Electronic components, including semiconductors, Aircraft components.
For textiles and apparel, the United States will implement zero tariffs under a tariff-rate quota (TRQ) mechanism. The policy is expected to benefit approximately four million workers in Indonesia’s textile sector, impacting up to 20 million people when including their families.
The move significantly enhances Indonesia’s export competitiveness in the world’s largest economy.
Indonesia Grants Zero Tariffs on U.S. Wheat and Soybeans
As part of the reciprocal framework, Indonesia will also eliminate tariffs on select U.S. agricultural commodities, particularly wheat and soybeans.
According to Airlangga, the policy ensures Indonesian consumers will not face additional costs for staple products derived from these imports, including noodles, tofu, and tempeh.
“This arrangement ensures no additional burden on Indonesian consumers for imported raw materials from the United States,” he stated.
Council of Trade and Investment Established
A central feature of the agreement is the creation of a Council of Trade and Investment, which will serve as the primary bilateral forum to manage trade and investment issues between the two countries.
The agreement’s annexes were further coordinated with the Office of the United States Trade Representative (USTR). The council will address tariff disputes, trade imbalances, and investment concerns before they escalate, strengthening economic stability and transparency.
Airlangga emphasized that the mechanism respects the sovereignty of both nations while promoting sustainable economic growth.
Direct Mandate from Prabowo and Trump
Cabinet Secretary Teddy Indra Wijaya stated that both leaders instructed their respective ministers to immediately implement follow-up measures to ensure the agreement’s effectiveness.
The Reciprocal Trade Agreement will enter into force 90 days after both countries complete their domestic legal procedures, including consultation with Indonesia’s House of Representatives.
Focused Solely on Trade Cooperation
Unlike several U.S. agreements with other countries, the US–Indonesia RTA strictly focuses on trade and economic cooperation. It excludes non-economic provisions such as nuclear reactor development, South China Sea policy, and border defense matters.
At the multilateral level, both nations reaffirmed their commitment under the World Trade Organization (WTO) to maintain a moratorium on customs duties for electronic transmissions. Indonesia also supports regulated cross-border data flows consistent with national laws and equivalent consumer data protection standards.
Additionally, both sides agreed to implement strategic trade management measures to prevent misuse of trade flows for non-peaceful purposes.
A Strategic Milestone in Indo-Pacific Economic Architecture
Negotiations intensified after President Trump’s tariff policy announcement in April 2025. Indonesia submitted four formal negotiation letters and conducted seven rounds of talks, including multiple in-person and virtual discussions with USTR officials.
The outcome positions Indonesia as a key strategic partner of the United States in the Indo-Pacific and reinforces both countries’ commitment to strengthening supply chains, enhancing economic security, and driving sustainable growth.
Agreement is widely viewed as a transformative milestone—reshaping US–Indonesia economic relations and redefining bilateral cooperation in the evolving global trade landscape. (AT Network)
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