February 22, 2026 | 08:52 pm
TEMPO.CO, Jakarta - The Coordinating Ministry for Economic Affairs of Indonesia has outlined the origins and progress of the Reciprocal Trade Agreement (ART) between Indonesia and the United States, which stemmed from the U.S. government’s unilateral imposition of reciprocal tariffs on several countries on April 2, 2025.
“Indonesia was included and subjected to a 32 percent tariff,” said Haryo Limanseto, spokesperson for the Coordinating Ministry for Economic Affairs, in a written statement on Sunday, February 22, 2026.
He explained that the U.S. based the policy on Indonesia’s trade deficit, which reached US$19.3 billion in 2024.
Why Did Indonesia Opt for Negotiations?
Haryo added that the Indonesian government viewed negotiations as necessary to maintain the competitiveness of the country’s export products, while also protecting the livelihoods of roughly 4–5 million workers employed in labor-intensive industries affected by the tariffs.
The government opted for diplomacy over retaliation, noting that retaliatory measures could have caused greater harm to the national economy.
Intensive negotiations with the U.S. followed, resulting in a reduction of the reciprocal tariff from 32 percent to 19 percent, announced on July 15, 2025.
The framework was formalized in a Joint Statement, in which both countries agreed to discuss and finalize the ART.
When Was the ART Signed and What Does It Cover?
On February 19, 2026, the Presidents of Indonesia and the United States officially signed the ART. The agreement set the reciprocal tariff rates and established exemptions for select Indonesian products, including palm oil, cocoa, coffee, rubber, and textiles, allowing them easier access to the U.S. market.
When Will the Agreement Take Effect?
Haryo noted that the agreement will take effect 90 days after both countries provide written confirmation that all legal procedures, including consultations with relevant institutions and ratification, have been completed.
He also emphasized that the ART can be reviewed or amended at any time, subject to written requests and mutual approval.
Meanwhile, U.S. President Donald Trump announced plans to raise his new global tariffs to 15 percent, a day after imposing a 10 percent tariff on imports from all countries following a Supreme Court ruling that annulled his previous economic policy.
Despite the Supreme Court decision, Coordinating Minister for Economic Affairs Airlangga Hartarto confirmed that the bilateral trade agreement with Indonesia remains in effect under its own mechanisms.
He explained that the court ruling pertained only to the global tariff and reimbursements to certain corporations, and does not affect the terms of the ART.
Ervana Trikarina Putri contributed to the writing of this article.
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