Indonesia, EU seal deal to lower tariffs

Indonesia and the European Union concluded a free trade agreement on Tuesday after nine years of talks, with both aiming to boost exports and investment and to offset the impact of US President Donald Trump's tariffs.

- SULTAN ANSHORI

Indonesia's Minister of Economic Affairs Airlangga Hartarto, right, and EU Trade Commissioner Maros Sefcovic attend a news conference after signing the agreement in Nusa Dua, Bali, on Tuesday.

(AFP)

Both sides will remove import duties on more than 90% of products, most of them as soon as the deal enters force, with the rest, including Indonesia’s 50% duty on EU cars, phased out over five years.

Indonesia says it expects bilateral trade, worth $30.1 billion for goods in 2024, to double in the first five years.

Since Trump’s reelection last November, the EU has gone into overdrive to forge new trade alliances, including with the South American bloc Mercosur and Mexico and also accelerating negotiations with India.

The 27-nation EU hopes these alliances will offset the impact of Trump's tariffs, as well as reducing dependency on China, particularly for minerals required for its green transition.