Washington, DC, February 23 - Indonesia and the United States have reached a significant bilateral trade understanding known as the Agreement on Reciprocal Trade, finalized in February 2026, to correct persistent imbalances in their economic exchanges. Under the terms, Jakarta pledges to remove duties on nearly all American shipments, covering more than 99% of export categories like farm goods, vehicles, industrial chemicals, and tech equipment, while Washington applies a moderated 19% tariff on most Indonesian imports, a notable reduction from an earlier proposed 32%. The arrangement also opens zero-tariff entry for 1,819 Indonesian product categories, including essential exports such as palm derivatives, seasonings, and tech parts. Beyond tariffs, the pact commits both parties to dismantling various trade hurdles, advancing digital commerce rules, bolstering supply chain security, settling intellectual property matters, and harmonizing regulations in areas like medical equipment and automotive safety.
A major highlight of the accord involves Indonesia's agreement to acquire 50 commercial jets from Boeing, anchoring roughly $13.5 billion in aviation and related procurements from the U.S. This forms part of wider commercial commitments totaling around $33 billion, encompassing $15 billion in energy resources and over $4.5 billion in U.S. farm produce. The aircraft purchase aligns with Indonesia's urgent requirements to upgrade its airline fleets amid surging passenger volumes in Southeast Asia's largest market, while providing Boeing with a substantial order to support production and employment in American aerospace hubs.
The inclusion of the Boeing jets in the package delivers clear advantages across borders. Indonesia gains improved air transport capacity, greater efficiency for domestic and regional carriers, and stronger infrastructure to accommodate expanding travel needs. On the U.S. side, it generates export revenue, preserves skilled jobs in manufacturing, and advances the goal of equitable trade partnerships. Representatives from both governments have portrayed the overall framework as mutually beneficial, laying the groundwork for durable economic collaboration.
Ultimately, this agreement demonstrates how strategic industrial purchases, like the 50-jet Boeing commitment, can drive comprehensive trade resolutions. By tying tariff concessions to concrete procurement actions, it fosters expansion in key industries such as aviation, energy, and agriculture, while enhancing long-term ties between these Pacific partners and influencing broader regional economic patterns.