US, Indonesia Chalk Out Strategic Management of Critical Minerals Trade

JAKARTA / WASHINGTON, July 24, 2025 — Witnessing a significant shift in global supply chain trends, the US and Indonesia are forging a partnership to create the roadmap for monitoring and managing trade in Indonesian critical minerals that have strategic value.

The timing of this collaboration is significant, as secure access to strategic resources has become a top priority for all countries.

Indonesia’s Chief Economic Minister Airlangga Hartarto told reporters that the two sides were still in discussions regarding ways to better regulate trade in vital and dual-use commodities.

“Strategic trade management is important to ensure transparency between both parties so that imports and exports of dual-function commodities with strategic value can be monitored,” the Minister said in a briefing regarding the recent trade deal between the US and Indonesia.

The partnership is primarily focused on Indonesia's vast mineral wealth and the United States' need to diversify its supply chains away from existing hubs. As critical minerals, energy transition, and technological advancement are moving rapidly, there is immense strategic importance to these resources. Most importantly, the term “dual-use” refers to materials and technologies that have legitimate civilian applications but could also be utilized for military or security purposes. This categorization makes this arrangement subject to additional regulatory scrutiny so that trade is conducted responsibly.

Recent Tariff Agreement

Notably, Indonesia is among the few nations to secure a tariff reduction deal with Washington before the critical August 1 deadline.

This agreement enables tariff rates on Indonesian products to be lowered to 19 percent from an earlier 32 percent. The tariff reduction is aimed at creating an immediate competitive advantage for Indonesian exports to the American market.

The preferential tariff reduction is being seen as a step that goes beyond a trade concession. Developments over the last two days are an indicator that the US and Indonesia are involved in a deep strategic alignment for critical resource management.

The timing of the partnership is seen as important, as both the US and Indonesia are involved in reorganizing supply chains for strategic minerals.

“This agreement creates a foundation for deeper cooperation in sectors vital to technological advancement and economic security,” said Indonesian officials during recent bilateral discussions.

Strategic Trade Management Discussions

The US has referred to the deal as an “agreement on the negotiating framework,” while the core focus of the upcoming partnership is what both sides refer to as "strategic trade management." The framework is designed to provide transparency and security in the movement of critical resources, said Indonesian officials.

According to Airlangga, both nations are formulating joint measures for monitoring and managing the trade of strategic minerals.

The discussions between the two countries have focused on creating efficient transparency mechanisms for tracking imports and exports.

In addition, establishing comprehensive monitoring systems for dual-function commodities is also a focus area for the two partners.

The US and Indonesia are also keen to implement safeguards to prevent strategic materials from reaching parties that are not authorized. Preventing the use of minerals by terror groups has also been taken into consideration in the emerging partnership.

Sectors Impacted by Strategic Minerals Management

The evolving partnership provides Indonesia multiple avenues for economic advancement beyond simple export growth.

The minerals, for which the partnership is being forged, have widespread usage across high-tech sectors that have seen rapid growth.

Artificial Intelligence infrastructure is heavily dependent on these minerals, as they require specialized processors and cooling systems.

These minerals could also support data center development, particularly for energy storage and processing components.

Their use could also be applied in advanced aviation technology, in terms of lightweight, high-strength components.

Notably, the emerging US-Indonesia mineral partnership is taking shape at a time when China has a substantial presence in global mineral processing.

The US-Indonesia partnership signifies more than a bilateral arrangement, as it indicates a paradigm shift in global mineral supply chains.

The top priority for all nations is to secure access to technology-enabling minerals, and partnerships such as the US-Indonesia pact will likely extend across resource-rich regions.

Indonesia is among the few nations to secure a tariff reduction deal with Washington before the critical August 1 deadline.

Inputs from Saqib Malik

Editing by David Ryder