26.08.202523:45:06UTC+00Indonesia Secures U.S. Tariff Exemption Deal on Commodities

The United States has reached a preliminary agreement to exclude Indonesian exports of cocoa, palm oil, and rubber from the 19% tariff imposed by former President Donald Trump on August 7. According to Indonesia’s chief trade negotiator, Airlangga Hartarto, this exemption will become effective once both parties finalize an agreement, although a specific timeline has not been established as Washington continues to engage in other tariff discussions. Indonesia was one of the first countries to negotiate a deal with Trump in July, yet it still faced tariffs comparable to those imposed on Thailand and Malaysia, and slightly below the 20% rate faced by Vietnam. In exchange for the tariff exemption, Jakarta has committed to investing billions of dollars in the U.S. economy and purchasing American crude oil, liquefied petroleum gas (LPG), aircraft, and agricultural products. Additionally, Indonesia will offer nearly zero tariffs on U.S. goods. Airlangga remarked that this tariff certainty, alongside progress in trade negotiations with the European Union, could increase economic growth to 5.4% by 2026, compared to approximately 5% this year. This is part of broader efforts to attract foreign investment to develop processing industries for commodities, solar panels, and semiconductors.