Indonesia, US firms sign deals worth US$38.4 billion ahead of Trump-Prabowo meet

WASHINGTON/JAKARTA: Indonesian and United States companies on Wednesday (Feb 18) signed deals worth US$38.4 billion ahead of Indonesian President Prabowo Subianto's meeting with US President Donald Trump to sign a final trade pact, the Indonesian government said in a statement.

The 11 deals, signed at a dinner for Prabowo hosted by the US Chamber of Commerce, were for partnerships in mining, energy, agribusiness, textiles, furniture and technology sectors, according to the statement.

"We hope to find partners who are ready to join us in our ongoing efforts to modernise and industrialise," Prabowo said in his speech at the dinner.

Prabowo said the deals were among the implementing agreements to the US-Indonesian trade deal that he is due to sign on Thursday with Trump, adding it would help reduce Indonesia's trade surplus with the US.

"I'm very optimistic about the future of our relationship," he said. 

The US$38.4 billion valuation was higher than the figure presented earlier in a fact sheet by US-ASEAN Business Council (USABC) at over US$7 billion, which included purchases by Indonesian firms of 1 million metric tons of US soybeans, 1.6 million tons of corn, and 93,000 tons of cotton over unspecified periods.

The council said Indonesia would also buy 1 million tons of wheat this year and up to 5 million tons by 2030.

The deals include a memorandum of understanding between US mining group Freeport-McMoRan and the Indonesian Ministry of Investment for critical minerals cooperation, and an agreement between state oil producer Pertamina and Halliburton Co to cooperate on oilfield recovery, USABC said. 

Freeport and the investment ministry signed an initial deal to extend its mining permit beyond 2041, Freeport-McMoRan Chairman Richard Adkerson said at the dinner.

"It is a life of resource extension, and we cannot wait to undertake delineation drilling of what that ore body will be for many decades to come in the future," he said.

The deals also include two semiconductor joint venture agreements, one valued at US$4.89 billion between Essence Global Group and an Indonesian partner, and another unvalued venture involving Tynergy Technology Group.

FARM GOODS

USABC valued Indonesia's purchases of soybeans at US$685 million, wheat at US$1.25 billion, cotton at US$122 million and an additional purchase of US shredded worn clothing for recycling at US$200 million.

In the decade from 2015 to 2024, Indonesia averaged annual imports of 2.3 million metric tons of US soybeans, nearly 800,000 tons of wheat, about 180,000 tons of cotton, and less than 100,000 tons of corn, according to US Census Bureau trade data. 

The Southeast Asian country has imported around US$3 billion worth of US agricultural products annually in recent years, making it the 11th-largest market for all US farm goods. 

Not all of the deals were given price tags, such as Indonesian purchases of US lumber and furniture products. 

There were no details provided about a "transnational free trade zone" pact signed by Indonesian industrial park developer Galang Bumi Industri and Solanna Group LLC. 

Indonesia announced in July a string of business deals with the US worth US$34 billion as part of its tariff negotiations, including wheat and soybean import purchases similar to those signed on Wednesday. 

The Indonesian leader arrived in Washington this week for Trump's Board of Peace meeting, with hopes Jakarta can secure a slight tariff reduction to 18 per cent from 19 per cent agreed last year. That would match the rate Trump granted to India earlier in February.

In remarks at the dinner, Deputy US Trade Representative Rick Switzer did not mention the final tariff rate for Indonesia, but said the Agreement on Reciprocal Trade between the two democracies "will mean more trade - bilateral trade. It will mean more investment. It'll mean deeper, more comprehensive economic, investment and trade ties".