The process began on April 2, when US President Donald Trump imposed reciprocal tariffs on 180 countries, including Indonesia, which faced a steep 32 percent rate. In response, President Prabowo Subianto authorized the formation of a special negotiation team led by Coordinating Economy Minister Airlangga Hartarto. This team coordinated across ministries, business associations and subject-matter experts under the “Indonesia Incorporated” framework.

After President Trump delayed the tariff implementation for 90 days from April 9 to July 9, Indonesia seized the opportunity to initiate bilateral talks. The first Indonesian delegation visited Washington, DC, from April 14 to 23, engaging with top US officials, including the US Trade Representative and Secretary of Commerce. The visit resulted in a Non-Disclosure Agreement (NDA) on a bilateral framework for reciprocal trade, investment and economic security.

Following Prabowo’s directive, Indonesia’s negotiation strategy emphasized fairness and balance, seeking to address the US trade deficit with Indonesia by proposing mutually beneficial trade, investment and market access opportunities. On July 7, a number of Indonesian and US companies signed commercial agreements reinforcing Indonesia's commitment to improving trade balance.

However, in a July 8 letter, Trump confirmed the tariff would still take effect on Aug. 1. In response, Minister Airlangga returned to Washington on July 9 to resume negotiations. President Prabowo later held direct talks with Trump, ultimately securing the tariff reduction to 19 percent, which is considered a historic achievement given the short timeframe and complexity of the talks.

On July 22, the US government released a Joint Statement on the Framework for US–Indonesia Reciprocal Trade Cooperation. While details are still being finalized, the agreement marks a major milestone in strengthening bilateral commercial ties.

"This deal is part of a broader, comprehensive cooperation package that includes tariff and non-tariff aspects, making Indonesia one of the fastest countries to reach a trade agreement with the US," said Haryo Limanseto, spokesperson for the Coordinating Economy Ministry.

Airlangga credited the “human interface” approach—face-to-face diplomacy with senior US officials—as key to accelerating the negotiations and building mutual trust. The same approach has been applied in talks with the European Union, resulting in a breakthrough on a Sunday, traditionally a day of rest in Europe, and drawing attendance from EU Commission President Ursula von der Leyen and the King of Belgium.

As the US is Indonesia’s second-largest export partner, with an economic value of up to US$ 30 trillion, the tariff reduction is expected to significantly boost Indonesia’s export competitiveness, protect labor-intensive industries and safeguard the jobs of an estimated 5.3 million workers. 

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