Indonesia has agreed to lower the reciprocal tariff rate imposed by the United States from 32% to 19% in exchange for the U.S. exempting various regulations on automobiles, agricultural products, and pharmaceuticals exported to Indonesia.
A senior official from the Trump administration briefed the media on the details of the trade agreement with Indonesia on the 22nd (local time), stating, "Indonesia will reduce tariffs to 0% on over 99% of products in trade with the United States and eliminate all non-tariff barriers to the U.S." Previously, President Donald Trump announced the conclusion of the trade agreement with Indonesia on the 15th.
The official noted regarding non-tariff barriers, "Indonesia will cease efforts to tax the circulation of data and will support the immediate and unconditional exemption from e-commerce tariffs at the World Trade Organization (WTO)."
He continued, "Indonesia is one of the few countries that wanted to impose taxes on the Internet to effectively take revenue away from U.S. corporations," adding, "This agreement has achieved a historic milestone by providing clarity needed for U.S. exporters and signaling to other countries that a tariff-free Internet is important."
In the meantime, the United States has pressured trading partners, including Korea, to eliminate various regulations on its big tech companies, categorizing them as "non-tariff barriers." It is interpreted that they have enforced such demands during negotiations with Indonesia as well.
The official reported that Indonesia agreed to eliminate pre-shipment inspections and certification requirements for U.S. products, including agricultural products, and that Indonesia would accept U.S. federal motor vehicle safety standards for automobiles imported from the United States.
He explained, "This is what the U.S. has sought for decades in the global market." The U.S. has argued that applying its safety standards along with the safety standards of other countries to imported American cars constitutes a trade barrier, demanding a reduction in the certification burden on U.S. corporations.
The official stated that Indonesia decided not to impose regulatory requirements that local facilities must be built or that local content must exceed a certain amount on U.S. corporations, and that it would accept the certification and pre-sale approval from the U.S. Food and Drug Administration (FDA) for medical devices and pharmaceuticals.
Indonesia also agreed not to impose restrictions on the export of essential minerals to the United States and to purchase U.S. products such as liquefied natural gas (LNG), stating it has ensured that the U.S. can benefit by at least $50 billion (approximately 69.7 trillion won).
Trump said on the same day through his social media platform, "Truth Social," that "Indonesia will supply valuable essential minerals to the U.S. and will conduct massive transactions worth billions of dollars to purchase Boeing aircraft and U.S. agricultural products and energy."
He added, "Indonesia has agreed to eliminate 99% of tariff barriers, becoming an open market for U.S. industrial and technological products as well as agricultural products," stating, "This transaction is a tremendous victory for our automobile manufacturers, technology corporations, workers, farmers, and the livestock and manufacturing sectors."