Indonesia said it has resolved all substantive issues in trade talks with the US and is on course to ink an agreement in late January, removing a major source of uncertainty for Southeast Asia’s biggest economy.
Both countries have aligned on the “crucial issues” in their draft agreement, protecting the mutual interests of both parties, Coordinating Minister for Economic Affairs Airlangga Hartarto said in an online presentation on Tuesday, after meeting with US Trade Representative Jamieson Greer in Washington on Monday.
The trade agreement will be signed by both President Prabowo Subianto and President Donald Trump, with the Indonesian leader expected to travel to the US at the end of January, said Dwisuryo Indroyono Soesilo, Indonesian ambassador to the US at the same briefing.
The rupiah and government bond yield were little changed after the report, while Indonesian stocks slipped 0.3% on Tuesday. The currency is Asia’s second-worst performer in 2025, having declined 4%.
“That should take away one of the uncertainties that has been a drag on the rupiah,” said Christopher Wong, a currency strategist at Oversea-Chinese Banking Corp. He added that a meaningful recovery in the currency would require improvements in domestic growth and fiscal conditions, as well as the return of foreign capital.
The US is one of Indonesia’s top trading partners, contributing the largest non-oil and gas trade surplus of $17 billion last year, according to official data. Indonesia’s main exports to the US include electronics, textiles, fishery products, footwear and palm oil.
The US has agreed to exempt tariffs on Indonesian key products including palm oil, cocoa, coffee and tea, said Hartarto, Indonesia’s lead negotiator. The US gets more access to Indonesia’s critical minerals, Hartarto said.
Hartarto said the substance of the draft agreement is broadly in line with the framework that was reached by both countries’ leaders in July. It mainly affects labor-intensive industries that employ an estimated 5 million workers in the nation.
Under the July accord, Indonesia was to eliminate tariffs on over 99% of US goods and remove non-tariff barriers, in exchange for the US reducing tariffs on Indonesian products from a threatened 32% to 19%. Indonesia had also agreed to purchase roughly $19 billion in American products, including 50 Boeing Co. jets and agricultural goods.
Earlier this month, negotiations were said to have hit sticking points. US officials claimed Indonesia had backtracked on its commitments, while Jakarta resisted US demands that it feared could limit its autonomy in engaging in strategic trade and investment agreements with other countries.
Similar concerns over sovereignty emerged in a recent US deal with neighboring Malaysia. Of particular concern for Indonesia was the potential impact on the critical mineral and energy sector, and its commerce with China and Russia.
“No Indonesian policies are restricted by this agreement,” Hartarto said, when asked about the US demands. The latest negotiations mainly involving linguistic harmonization, as is normal in reaching a trade agreement, he said.
The deal between Indonesia and the US “is commercial and strategic in nature and benefits the economic interests of both countries equally,” Hartarto said.