February 20, 2026 l Dalena Reporters
JAKARTA — United States President Donald Trump and Indonesian President Prabowo Subianto have agreed to strengthen bilateral relations through a landmark reciprocal trade agreement, a pact both leaders say will usher in a “new golden age” of economic and strategic cooperation between the two nations.
Finalised on February 19, 2026, the deal removes tariffs on nearly all U.S. exports to Indonesia and reduces U.S. levies on Indonesian goods to 19 per cent, marking a significant shift toward freer trade between the world’s largest economy and Southeast Asia’s largest archipelago nation.
Officials detailed that Indonesia is expected to purchase approximately $33 billion in U.S. products, encompassing sectors such as energy and commercial aircraft. In return, Indonesia agreed to tariff-free access for key exports like coffee, spices and pharmaceuticals, alongside new mechanisms for textiles and apparel to qualify for exemptions under specific conditions.
The agreement, achieved after seven rounds of negotiation and following Trump’s earlier threat of steep 32 per cent duties on Indonesian goods, was described as “win-win” by Indonesian coordinating minister and chief negotiator Airlangga Hartarto. He emphasised that the pact aims to boost domestic employment and strengthen economic resilience in both countries.
Both governments have committed to implementing the accord within 90 days of completing required domestic legal steps, though experts caution that some aspects could evolve as implementation nears.
The deal also touches on critical minerals and energy cooperation, with Jakarta signalling readiness to facilitate U.S. investment in strategic sectors traditionally more restricted to foreign capital a notable shift in Indonesia’s economic policy.
Analysts highlight that while the agreement removes many tariff barriers, its provisions may place significant new obligations on Indonesia, suggesting deeper integration into U.S.–led economic frameworks while testing Indonesia’s capacity to balance growth, sovereignty and global competition.
This pact unfolds amid wider U.S. diplomatic and economic efforts coinciding with the first meeting of the Board of Peace a Trump-backed international initiative for post-conflict reconstruction and global dispute resolution underscoring Washington’s broader diplomatic push in the region and beyond.