EU and Indonesia Seal Landmark Trade Deal with Major Tariff Reductions

The European Union and Indonesia have finalized a transformative trade agreement after nearly a decade of negotiations, eliminating or slashing tariffs on 96% of goods within five years. EU Trade Chief Maros Sefcovic hailed the deal as a "new chapter of huge proportions," projecting €3 billion in additional exports to Southeast Asia's largest economy.

Automotive, machinery, and agricultural sectors stand to gain most from the pact. EU car exporters will see Indonesia's 50% duties phased out entirely, while machinery tariffs drop from 30% to zero at an accelerated pace. The agreement also removes licensing barriers for European chemical exports and grants preferential treatment to Indonesian processed materials in EU markets.

This strategic MOVE comes as global trade dynamics shift under protectionist policies elsewhere, with the deal expected to save European businesses €600 million annually in tariff costs. Indonesia's untapped trade potential with the EU—its economy eclipses Vietnam, Thailand, and the Philippines combined—makes this agreement particularly significant for rebalancing regional commerce flows.