Indonesia is making significant strides in its global trade strategy, securing key progress on two fronts: a breakthrough in its long-stalled Comprehensive Economic Partnership Agreement (CEPA) with the European Union, and a tariff reduction agreement with U.S. President Donald Trump.
During a high-level meeting in Brussels, European Commission President Ursula von der Leyen and Indonesian President Prabowo Subianto announced that the EU and Indonesia have reached a “political agreement” to move CEPA toward completion, with the final deal expected to be signed by September 2025.
Originally launched in 2016, CEPA aims to deepen cooperation across 21 areas, including trade, investment, customs procedures, and services. The agreement is expected to boost manufacturing and job creation in Indonesia, while helping the EU secure critical raw materials and expand clean technology and steel supply chains.
“The deal will open new markets and strengthen Europe’s economic resilience,” said von der Leyen. Prabowo added that CEPA would play a key role in supporting sustainable development and expanding Indonesia’s industrial base.
Indonesian Economic Minister Airlangga Hartarto confirmed the agreement is on track for signing in Q3 2025, calling it a “major milestone” in bilateral ties.
Tariff Relief from Washington
In a parallel development, U.S. President Donald Trump announced on July 15 that the U.S. will reduce tariffs on Indonesian imports from 32% to 19%, following direct talks with President Prabowo. The announcement comes just weeks before a new round of U.S. tariffs—up to 40% on imports from 14 countries, including Indonesia—was set to take effect on August 1.
The decision marks a rare concession in the Trump administration’s aggressive trade stance and provides critical relief for Indonesian exporters, especially in sectors vulnerable to U.S. protectionist policies.
Together, these developments reflect Indonesia’s efforts to diversify its trade partnerships and reduce reliance on any single market, positioning itself as a more agile and resilient player in the global economy.
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