The White House released a Joint Statement concerning a framework for negotiating an Agreement on Reciprocal Trade between the United States and Indonesia. The eventual agreement will result in tariff reductions by Indonesia on U.S.-origin products, engagement on a variety of non-tariff measures, and reduction of the U.S. reciprocal tariff rate on goods from Indonesia to 19 percent. The rules of origin applicable to the U.S. tariff reductions remain subject to negotiation, with the intent of combating transshipment. The Joint Statement also envisions bilateral cooperation “to address unfair trade practices of other countries” and over $20 billion USD worth of “forthcoming commercial deals” for the purchase of aircraft, agricultural products, and energy products.
Reciprocal Tariff Dealmaking
Yesterday’s Joint Statement follows a period of intense negotiating activity sparked by the Trump Administration’s “reciprocal” tariff announcements, including the transmittal of a letter to the Government of Indonesia on July 7, 2025, announcing that a tariff rate of 32% would apply to Indonesian products starting on August 1, 2025. Just over a week after the White House letter was issued, U.S. President Trump and Indonesian President Prabowo Subianto discussed the terms of a trade deal, which was subsequently announced via social media on July 15, 2025. This preliminary announcement provided for a 19% reciprocal tariff rate on Indonesian products, along with a few other major terms, but details were limited.
The Joint Statement provides significant additional substance and a signal of things to come, but remains a negotiating framework. The Joint Statement envisions a further “Agreement on Reciprocal Trade” between the two countries. Ultimately, certain provisions will need to be implemented in the Harmonized Tariff Schedule of the United States (HTSUS). The date on which any agreement will enter into force also remains to be seen.
Tariff Provisions and Open Items
The lead item in the Joint Statement concerns bilateral tariff reductions. On the Indonesian side, the country will “eliminate approximately 99 percent of tariff barriers for a full range of U.S. industrial and U.S. food and agricultural products exported to Indonesia.” The phrasing suggests a degree of product specificity, and associated the White House fact sheet characterizes it as “99% of U.S. products exported to Indonesia.” There is an understanding that certain culturally important goods may not be included in the tariff reductions. These may include pork products and alcoholic beverages, but this remains subject to negotiation.
On the U.S. side, the reciprocal tariff rate (currently 10%) will be capped at 19 percent “on originating goods of Indonesia.” Further reductions below 19 percent “may” also be undertaken for “commodities that are not naturally available or domestically produced in the United States.” Importantly, the Joint Statement describes the applicable rules of origin as subject to negotiation, with the overarching intent of “ensur{ing} that the benefits of the agreement accrue primarily to the United States and Indonesia.” This echoes a provision of the US-UK Economic Prosperity Deal concerning the “appl{ication of} rules of origin that maximize bilateral trade and prevent non-participants from using our bilateral arrangement to circumvent tariffs,” as well as the an anti-“transshipment” rule referenced in the announcement of a reciprocal trade deal with the Government of Vietnam.
This standard echoes another provision of the Joint Statement, which describes a bilateral commitment to enhance economic, national, and supply chain cooperation, in part by “complementary actions to address unfair trade practices of other countries.” Topics familiar to the US-UK Economic Prosperity Deal, such as export controls, investment security, and combating duty evasion, are also mentioned, and appear to be taking shape as forms of alignment that USTR is seeking to incorporate into reciprocal tariff dealmaking as a general matter. And, while the UK was already a member of the Global Forum on Steel Excess Capacity (GFSEC) at the time of their bilateral deal, the Joint Statement specifically provides that Indonesia will commit to join this multilateral group of steelmaking countries.
Section 232 in the Background
Notably absent from the Joint Statement are any carve-outs for Indonesia in areas subject to ongoing investigations under Section 232 of the Trade Expansion Act of 1962 (Section 232). Instead, Indonesia appears to have been able to offer something to the United States in several U.S. sectors impacted by Section 232.
First, insofar as the purpose of GFSEC is to address global steelmaking overcapacity, which lies at the root of the harms identified in the Section 232 steel investigation, Indonesia’s commitment to participate signals, at minimum, an acknowledgment of those concerns. Second, recalling that the Section 232 investigation on critical minerals focuses on processed critical minerals, the Joint Statement includes an Indonesian commitment to “remove restrictions” on Indonesian exports of “industrial commodities, including critical minerals” to the United States. Increasing exports of raw critical minerals could buoy U.S. or allied processing operations. Third, although the precise mechanism of government involvement is unclear, the bilateral Joint Statement references “forthcoming commercial deals between U.S. and Indonesian companies” to purchase $3.2 billion dollars’ worth of aircraft, another industry subject to an ongoing Section 232 investigation. Finally, several of the non-tariff areas described below relate to enabling U.S. exports in Section 232 priority industries, such as automotives and pharmaceuticals.
Non-Tariff Areas of Focus
The bulk of the Joint Statement addresses non-tariff measures, including barriers that the U.S. and Indonesia intend to work together to address, as well as commitments in the areas of labor rights and environmental protection. These provisions are at once notable in both their specificity and the significant details that remain to be defined. Many of the non-tariff areas that the Joint Statement targets for further action were previously identified in the U.S. Trade Representative’s March 2025 report on Foreign Trade Barriers.
The Joint Statement’s non-tariff “priority areas” are:
- Exempting U.S. companies and originating goods from local content requirements;
- Accepting vehicles built to U.S. federal motor vehicle safety and emissions standards;
- Accepting FDA certificates and prior marketing authorizations for medical devices and pharmaceuticals;
- Removing certain labeling requirements;
- Exempting U.S. exports of cosmetics, medical devices, and other manufactured goods from certain requirements;
- Resolving intellectual property issues identified in USTR’s Special 301 Report; and
- Reforming Indonesian conformity assessment procedures.
Addressing certain of these areas may include the removal of import restrictions or licensing requirements on U.S. remanufactured goods and the elimination of pre-shipment inspection or verification requirements for U.S. goods.
Trade in U.S. food and agricultural products is another evident priority area. The Joint Statement mentions agreements to:
- Exempt U.S. food and agricultural products from all import licensing and commodity balance requirements;
- Ensure “transparency and fairness” with respect to geographical indications;
- Provide permanent Fresh Food of Plant Origin (FFPO) designation for all applicable U.S. plant products; and
- List all U.S. meat, poultry, and dairy facilities and accept certificates issued by U.S. regulatory authorities.
Indonesia has also pledged to address conditions for digital trade, services, and investment. It will ensure the ability to transfer personal data to the United States, eliminate existing HTS tariff lines on “intangible products,” suspend related requirements on import declarations, and support a permanent moratorium on customs duties for electronic transmissions at the World Trade Organization (WTO). Additionally, Indonesia has committed to take steps to implement the WTO Joint Initiative on Services Domestic Regulation, including submitting revised commitments for certification.
The remaining non-tariff commitments relate to raising labor and environmental standards in Indonesia. Regarding labor, the Joint Statement indicates a broad commitment by Indonesia to “protect{} internationally recognized labor rights” as well as “amend its labor laws” to “fully protect” workers’ rights to freedom of association and collective bargaining. Prohibition of the importation of goods produced by forced or compulsory labor is also included. When combined with the overarching effort toward “complementary actions to address unfair trade practices of other countries,” the ultimate impact may be for entities identified under U.S. forced labor law to face scrutiny in Indonesia as well.
The environmental commitments are generally focused on specific sectors — forestry, fishing, and wildlife. For example, the Joint Statement mentions combating trade in illegally harvested forest products, accepting and implementing the WTO Agreement on Fisheries Subsidies, and generally combating illegal fishing and wildlife trade. Although the environmental provisions were not mentioned in the accompanying White House fact sheet, they appear related to the “Seafood Strategy” announced in April.
Adjusting Supply Chains and Negotiating Settlements
The attorneys, licensed customs brokers, compliance professionals, economists, and trade specialists of Cassidy Levy Kent regularly assist companies in evaluating their supply chains to ensure compliant market access and adjust for tariff-related developments, both mitigating burdens and taking advantage of opportunities. Cassidy Levy Kent also leverages its thorough understanding of relevant legal regimes to advise governments on tariff policy and procedures.