February 20, 2026 | 09:37 pm
TEMPO.CO, Jakarta - Trade Minister Budi Santoso is optimistic that Indonesia's exports to the US will climb after the signing of the Agreement on Reciprocal Trade in Washington, D.C., on Friday morning, Jakarta time.
Indonesia faces a 19 percent tariff to enter the US market, Budi said. However, about 1,819 Indonesian tariff lines will receive a 0% import duty under the new agreement.
“Exports should increase. Several of our leading commodities now enjoy zero percent tariffs, so logically shipments to the US should rise,” Budi said in Jakarta on Friday.
Budi hopes the ratification process for the trade deal can be completed this year, allowing prompt implementation. so its implementation can soon commence. “I think ratification can be finalized this year, as it’s still early. So, we can implement it this year, 90 days after the ratification," he said.
Commodities eligible for zero tariffs include palm oil, coffee, cocoa, spices and rubber, as well as electronics components such as semiconductors and aircraft parts.
Indonesia and the US also agreed to apply a zero-tariff scheme for textiles and apparel under a Tariff Rate Quota mechanism.
The scheme allows a specified volume of Indonesian textile and garment exports to enter the US duty-free, with quotas linked to Indonesia’s imports of US raw materials such as cotton and man-made fiber.
Throughout 2025, the US contributed a surplus of US$21.12 billion for Indonesia, driven largely by electrical machinery and equipment, knitted apparel and accessories, and footwear.
Indonesia’s exports to the US reached US$30.96 billion, led by mechanical machinery and equipment, vehicles and parts, and iron and steel products.
Imports from the US totaled US$9.84 billion, mainly mechanical machinery and parts, oilseeds and oleaginous fruits, and electrical machinery and equipment.
Executive Director of the Center of Reform on Economics (CORE) Indonesia Mohammad Faisal emphasized the importance of downstreaming amidst the trade deal between Indonesia and the US.
"If the major commodities are palm oil, coffee, and cocoa, doesn't mean it won't be good for the raw material exporters; it will remain advantageous. But what about downstreaming?" he queried, adding that restriction on raw material exports is one of the supporting policies of downstream industry.
"And it is necessary since investors in downstream industries must ensure the domestic sufficiency of raw materials," he added.
Faisal warned that this could affect the industry development of these commodities, citing cocoa as an example. "We have been lacking because, besides domestic production becoming increasingly limited, processed [cocoa] is preferred for export abroad rather than domestic distribution because it's more profitable," he said.
According to Faisal, the government must not neglect its downstream bid to bolster domestic industries, both in the agricultural processing sector and mining.
"So, if there is a reduced barrier to exporting raw materials, it will be easier for exporters yet more difficult to push for downstream, which is a government priority agenda," he said.
Read: Apindo Flags Sectors Vulnerable to Impact of Indonesia-US Tariffs
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