Indonesia Drops Tariffs on 99% of US Goods in New Deal

Indonesia has eliminated tariffs on 99% of American goods in a sweeping trade agreement announced Thursday, marking what both countries call the start of a "new golden age" in economic partnership.

The deal unlocks Southeast Asia's largest economy for American farmers, manufacturers, and tech companies. Indonesian businesses simultaneously committed to $38.4 billion worth of deals with U.S. companies, including massive purchases of soybeans, corn, wheat, and cotton.

President Prabowo Subianto traveled to Washington to finalize the agreement and attend the inaugural meeting of President Trump's Board of Peace. The timing highlights how economic cooperation and international stability efforts can move forward together.

Under the agreement, Indonesia removes nearly all barriers to American products while the U.S. maintains a 19% tariff rate on Indonesian goods. Indonesia also pledged to eliminate restrictions on exporting critical minerals, materials essential for everything from smartphones to fighter jets.

The critical minerals cooperation addresses a major concern for American manufacturers who've faced supply chain vulnerabilities. These materials power modern technology and defense systems, making reliable access crucial for national security.

Indonesian companies agreed to purchase 1 million tons of soybeans, 1.6 million tons of corn, 93,000 tons of cotton, and up to 5 million tons of wheat by 2030. These agricultural deals provide predictable markets for American farmers while ensuring food security for Indonesia's 280 million people.

The agreement also covers joint ventures in computer chips and oil field recovery technology. Both countries say the cooperation will promote economic growth that extends beyond their borders to benefit global prosperity.

"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 at the U.S. Chamber of Commerce.

The Ripple Effect: This partnership demonstrates how nations can bridge differences through mutual economic benefit. Indonesia positioned itself as an "honest broker" between major powers, showing smaller nations can play constructive roles in easing global tensions while strengthening their own economies.

Vietnam and Cambodia are also pursuing similar trade frameworks, suggesting a broader shift toward regional economic integration. These Southeast Asian partnerships could reshape global supply chains and create more balanced trade relationships.

The agreement shows how diplomacy and commerce can work together to build lasting international relationships that benefit ordinary citizens through jobs, lower prices, and economic opportunity.