On February 20, 2026, during President Prabowo Subianto's visit to Washington, Indonesia and the United States finalized a significant reciprocal trade agreement, which the White House hailed as a 'great' deal. Under this agreement, Indonesia will eliminate tariffs on over 99% of American goods, while the U.S. will maintain a 19% tariff on most Indonesian exports, consistent with tariffs set for Cambodia and Malaysia. This deal, part of President Donald Trump’s initiative, the 'Board of Peace', aims to enhance economic ties and stability in the region. Additionally, the agreement includes tariff exemptions for key Indonesian commodities such as chocolate and coffee, which are expected to bolster Indonesia's economic security (South China Morning Post, The Diplomat). Furthermore, Indonesia's commitment to send 8,000 troops to Gaza marks a notable shift in its international military stance, complementing the economic agreement and highlighting Indonesia's strategic positioning in global affairs.
ECONOMY
Indonesia Records $2.5 Billion Current Account Deficit

On Feb 20, 2026, Indonesia and the U.S. finalized a key trade deal eliminating tariffs on most American goods, while Indonesia sends troops to Gaza, marking a strategic shift amid economic challenges.
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