• Indonesia and the US have resolved all substantial issues for a new tariff deal.
• A signing event is scheduled for late January involving President Prabowo Subianto and President Donald Trump.
• The agreement includes tariff exemptions for Indonesian exports and access to critical minerals for the US.
• The deal aims to balance market access between the two economies.
• Indonesia will commit to purchasing approximately US$19 billion in American goods.

Indonesia and the United States have settled all significant issues in negotiations regarding a new tariff deal, with plans for the signing of an agreement by Presidents Prabowo Subianto and Donald Trump at the end of January. Senior Economic Minister Airlangga Hartarto announced that the US had agreed to exempt tariffs on key Indonesian exports, specifically palm oil, tea, and coffee, while also seeking access to Indonesia's critical minerals. This announcement comes after a period of uncertainty in negotiations where both parties seemed to be at an impasse, although Hartarto emphasized that all substantial issues had now been resolved, according to Channel News Asia, India Times, Reuters, and South China Morning Post.

The upcoming trade deal, known as the Agreement on Reciprocal Trade (ART), is optimal for both nations, with the US reducing tariffs on Indonesian goods from 32% to 19%. Minister Hartarto detailed that this agreement would not limit Indonesia's ability to engage in other trade deals, aiming instead to protect mutual interests. "No Indonesian policies are restricted by this agreement. It is commercial and strategic in nature, benefiting the economic interests of both countries," he said, as stated in Channel News Asia and South China Morning Post.

Significantly, the agreement is expected to facilitate Indonesia's purchase of approximately US$19 billion worth of American goods, including aircraft like Boeing jets and various agricultural products. This expansion in trade aims to assert Indonesia's position as the largest economy in Southeast Asia, aligning with US interests in diversifying supply sources. The negotiations also highlight a framework that encourages cooperation in digital trade and technology, further emphasizing the two nations' economic relationship, according to India Times and Reuters.

The two countries have reported significant bilateral trade, with Indonesia being the second-largest export market for the US. The trade exchange from January to October 2024 was reported at US$36.2 billion, showing a robust trade surplus for Indonesia, which exemplifies the importance of this agreement as a strategic economic maneuver for both nations as they look to future collaborations, as highlighted by Reuters and South China Morning Post.