Executive Summary

Key insights and market outlook

Indonesia and the US have reached a near-final agreement on the Agreement on Reciprocal Tariff (ART), with tariff exemptions for key Indonesian exports like palm oil, coffee, and cocoa ¹

². The deal, expected to be signed by Presidents Prabowo and Trump in January 2026, involves Indonesian access to the US market in exchange for US access to Indonesia's critical minerals ⁵⁶. Economists view the deal as potentially beneficial if the reciprocal benefits are clear and substantial ³.

Full Analysis

02

Deep Dive Analysis

Indonesia-US Trade Agreement Nears Completion

Reciprocal Tariff Deal Takes Shape

Indonesia and the United States have made significant progress in their negotiations on the Agreement on Reciprocal Tariff (ART), bringing the deal to the brink of finalization ⁵

⁶. The agreement is expected to be signed by Indonesian President Prabowo Subianto and US President Donald Trump in January 2026, following a series of technical meetings scheduled for early next year ⁶.

Key Concessions and Benefits

The ART agreement includes significant concessions from both sides. The US has agreed to grant tariff exemptions for key Indonesian export products such as palm oil, coffee, cocoa, and tea, providing relief to industries affected by the previous 19% reciprocal tariff ¹

². In return, Indonesia is expected to grant the US access to its critical minerals, which are vital for various high-tech industries ¹³.

Economic Implications

Economists view the deal as potentially beneficial for Indonesia, provided that the reciprocal benefits are clear, substantial, and optimized for long-term gains ³

. Josua Pardede, Chief Economist at Bank Permata, noted that critical minerals are not just commodities but strategic assets for industry, state revenue, and geopolitical positioning ³.

Negotiation Timeline

The technical teams from both countries are scheduled to meet in the second week of January 2026 to complete the legal scrubbing and document cleanup, with the target completion date between January 12-19 ⁶

. Following this, the final agreement is expected to be signed by the two presidents before the end of January 2026 ⁶.

References