 U.S. Announces Terms of Trade Agreement to be Negotiated with Indonesia |
Source |
American Shipper |
Post Date |
07/29/2025 |
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President Trump announced July22 that the U.S. and Indonesia have agreed to a framework for negotiating abilateral trade agreement. The White House said that ?n the coming weeks?the two sides will negotiate and finalize this agreement, prepare it for signature, and undertake domestic formalities in advance of the agreement taking effect.
The Trump administration also announced trade deals with Japan and the Philippines this week.
What the U.S. Will Do
According to information from the White House, the U.S. has agreed to reduce to 19 percent its ?eciprocal?tariff on originating goods of Indonesia. That tariff is currently scheduled to increase from 10 percent to 32 percent as of Aug. 1, and it was not immediately clear when the 19 percent rate will take effect.
The U.S. also agreed to identify certain commodities that are not naturally available or domestically produced in the U.S. ?or a further reduction in the reciprocal tariff rate.?It is unknown how such commodities will be identified, how long that process may take, or what the lower duty rates may be.
The White House added that the two sides will negotiate ?acilitative rules of origin?that ensure that the benefits of the agreement accrue primarily to the U.S. and Indonesia. Those rules could provide further clarification on U.S. efforts, in this and other announced agreements, to reduce the transshipment of goods from China through third countries. Press sources indicated that the Indonesia framework provides for a 40 percent tariff on transshipped goods, which will be defined as those that include a specified (but as yet unknown) percentage of inputs from non-market economies.
What Indonesia Will Do
For its part, the U.S. said, Indonesia has agreed to take the following actions.
- eliminate tariff barriers on more than 99 percent of U.S. industrial, food, and agricultural products
- address its non-tariff barriers in priority areas, including (1) exempting U.S. companies and originating goods from local content requirements, (2) accepting vehicles built to U.S. federal safety and emissions standards, (3) accepting Food and Drug Administration certificates and prior marketing authorizations for medical devices and pharmaceuticals, (4) exempting U.S. exports of cosmetics, medical devices, and other manufactured goods from certain certification and labeling requirements,(5) removing import restrictions or licensing requirements on U.S. remanufactured goods and their parts, (6) eliminating pre-shipment inspection or verification requirements on imports of U.S. goods, (7) adopting and implementing good regulatory practices, (8) taking steps to resolve many long-standing intellectual property issues, and (9) addressing U.S. concerns with conformity assessment procedures
- address and prevent barriers to U.S. food and agricultural products, including exempting such goods from all import licensing regimes, ensuring transparency and fairness with respect to geographical indications, providing permanent fresh food of plant origin designation for all applicable U.S. plant products, and recognizing U.S. regulatory oversight, including listing of all U.S. meat, poultry, and dairy facilities and accepting certificates issued by U.S. regulatory authorities
- address barriers impacting digital trade, services, and investment
- eliminate existing HTS tariff lines on intangible products, susp related requirements on import declarations, and support a permanent moratorium on customs duties on electronic transmissions at the World Trade Organization immediately and without conditions
- join the Global Forum on Steel Excess Capacity and take effective actions to address global excess capacity in the steel sector and its impacts
- adopt and implement a prohibition on the importation of goods produced by forced or compulsory labor, am its labor laws to ensure that workers?rights to freedom of association and collective bargaining are fully protected, and strengthen enforcement of its labor laws
- adopt and maintain high levels of environmental protection and effectively enforce its environmental laws, including by combating trade in illegally harvested forest products; illegal, unreported, and unregulated fishing; and illegal wildlife trade
- removing restrictions on exports to the U.S. of industrial commodities, including critical minerals
The two sides further expressed a commitment to ?trengthening economic and national security cooperation to enhance supply chain resilience and innovation through complementary actions to address unfair trade practices of other countries, and through cooperation on export controls, investment security, and combatting duty evasion.?
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