WASHINGTON: The White House announced a reciprocal trade agreement with Indonesia on Thursday while President Prabowo Subianto was in Washington to attend the first meeting of President Donald Trump’s Board of Peace.
Under the agreement, Southeast Asia’s largest economy will eliminate tariffs for 99 percent of American goods while the US will maintain tariffs on most Indonesian goods at 19 percent, the White House said. That is the same rate the US has set for Cambodia and Malaysia. Indonesia also agreed to address non-tariff barriers to US goods and to remove restrictions on exports to the US for critical minerals and other industrial commodities, the White House said.
Indonesian and US companies also reached 11 deals this week worth $38.4 billion, including purchases of US soybeans, corn, cotton and wheat, cooperation in critical minerals and oil field recovery, and joint ventures in computer chips.
“We have negotiated very intensively over the last few months, and I think we have reached solid understandings on many issues,” Prabowo told business executives Wednesday at the US Chamber of Commerce.
A White House statement called it a “great deal” and said it “will help both countries to strengthen economic security, promote economic growth, and thereby continuously lead to global prosperity.”
The agreement was later signed by US Trade Representative Jamieson Greer and his Indonesian counterpart, Airlangga Hartarto.
Hartarto told a news conference from Washington that both governments cast the agreement as marking the start of a “new golden age” in bilateral economic ties and Indonesia will introduce measures designed to keep trade flows secure and prevent misuse of sensitive goods.
Indonesia’s pledge for Gaza stabilization force
The agreement was announced the same day that Prabowo, leader of the world’s most populous Muslim country, reiterated his pledge at the Board of Peace meeting to send 8,000 troops or “more if necessary” for an international stabilization force in Gaza.
Indonesia was among the first to make a firm commitment to a critical element of Trump’s postwar Gaza reconstruction plan.
“President Prabowo of Indonesia, thank you very much,” Trump said at the Board of Peace meeting. “It’s a big country you have, and you do a great job.”
Prabowo praised Trump in return. “We are very optimistic with the leadership of President Trump, this vision of real peace will be achieved,” Prabowo said. “There will be problems, but we will prevail.”
Cambodia and Vietnam are the two other Southeast Asian countries that joined the board, which was originally envisioned as overseeing the Gaza ceasefire but has taken shape with wider ambitions to broker other global conflicts.
Their leaders also came to Washington for the inaugural meeting. Cambodia has already inked a trade deal with the US, while Vietnam has reached a framework agreement.
Critical minerals play into Indonesia deal
Indonesian companies agreed this week to buy 1 million tons of soybeans, 1.6 million tons of corn and 93,000 tons of cotton from the US They also pledged to buy up to 5 million tons of US wheat by 2030.
The countries agreed to cooperate on critical minerals, though details were not immediately available.
Washington is seeking Indonesia’s agreement to lift restrictions on critical mineral exports, which the Trump administration argues could safeguard US manufacturers from supply‑chain disruptions. The administration has sought to defend against China’s stranglehold on the key elements needed for everything from fighter jets to smartphones.
At the Chamber of Commerce event, Prabowo said Indonesia can serve as a “bridge” and “honest broker” between great powers, apparently referring to the US-China competition.
Vietnam’s leader makes first visit to the US since being reelected
At the Board of Peace meeting, Trump called Vietnam “incredible as a country and as a force” and told leader To Lam that it was “a really great honor to have you.”
Lam’s visit to the US is his first since he was reelected as the head of Vietnam’s ruling Communist Party last month. Typically, China is an initial stop in a nod to the countries’ ideological ties and Beijing’s status as Vietnam’s largest trading partner. Lam did visit China in August 2024 before traveling to the US during his first term.
Analysts say Lam’s visit to the US before traveling to Beijing this time around is a notable shift in sequencing. Hanoi describes its foreign policy as independent and balanced among major powers.
Trade negotiations between Vietnam and the United States are ongoing following the Trump administration levying 20 percent tariffs on Vietnamese exports. The latest, sixth round of talks concluded in early February.