On February 19th local time, the United States and Indonesia officially signed a reciprocal trade agreement, which is a major boon for Indonesia's textile and apparel industry. According to the agreement, Indonesian textile and apparel products will not be included in the 1819-item direct zero-tariff list, but will instead enjoy zero-tariff treatment through a tariff quota mechanism. The zero-tariff amount is linked to the amount of US-origin textile raw materials (such as cotton and synthetic fibers) used in the product.

Previously, the United States imposed tariffs of up to 32% on Indonesian textiles and apparel. Under the new agreement, the US will maintain a reciprocal tariff of 19% on Indonesian textiles and apparel as a whole, with zero tariffs on textiles and apparel within quotas and a 19% tariff on exports exceeding quotas, significantly reducing export costs. Approximately 4 million people employed in Indonesia's textile and apparel industry will directly benefit, with related benefits reaching 20 million people. 

The agreement will officially take effect 90 days after the two countries complete legal procedures (including consultations in the Indonesian parliament), at which time the competitiveness of Indonesian textile and apparel exports to the United States will be significantly enhanced.

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