Following a meeting in Brussels between European Commission President Ursula von der Leyen and Indonesian President Prabowo Subianto, it was announced that the European Union (EU) and Indonesia have reached a “political agreement” to advance their Comprehensive Economic Partnership Agreement (CEPA), which was originally launched in 2016. This development is seen as a turning point after years of slow progress, with the deal expected to be finalized by September 2025.
The agreement aims to strengthen economic ties between Indonesia and the EU and enhance resilience against global trade uncertainties. Von der Leyen stated that the deal would open new markets and reinforce critical supply chains for Europe’s clean technology and steel industries. Prabowo emphasized that it would help expand Indonesia’s manufacturing sectors, create jobs, and support sustainable development goals.
CEPA is designed to cover 21 areas of cooperation, including trade, investment, customs procedures, and services. Indonesian Economic Minister Airlangga Hartarto noted that the agreement is expected to be signed in the third quarter of 2025 and highlighted it as a major milestone in bilateral economic relations.
This development is seen as part of Indonesia’s efforts to diversify its global trade relationships. Amid high US import tariffs, Indonesia’s deepening economic cooperation with the EU is viewed as a strategic step.
Tariff reduction from Trump
US President Donald Trump, on Tuesday, July 15, announced that he had reached an agreement with Indonesian President Prabowo Subianto to reduce tariffs on Indonesian imports from 32 percent to 19 percent . As previously reported by SteelOrbis, Trump had announced new tariffs of up to 40 percent on imports from 14 countries, including Indonesia, set to take effect on August 1.