The United States and Indonesia have finalized a bilateral trade agreement that will set tariffs on most Indonesian goods at 19%, significantly below the rates imposed on other Southeast Asian nations under Washington’s current trade policy.

In exchange, Jakarta has agreed to lower barriers for American agricultural products, pharmaceuticals, and digital services, while strengthening intellectual property protections for US companies operating in the archipelago.

The deal, announced jointly by trade ministers in Washington, is being viewed as a strategic move by the US to deepen ties with Indonesia — the world’s fourth most populous country and a key counterweight to Chinese influence in the region.

“This agreement recognizes Indonesia’s importance as a strategic partner and major emerging market,” said US Trade Representative Katherine Tai. “It creates a framework for mutual economic growth.”

Indonesian business groups broadly welcomed the agreement, though some domestic manufacturers expressed concern about increased competition from American imports. The deal still requires ratification by Indonesia’s parliament.