US President Donald Trump on Tuesday declared a sweeping new trade deal with Indonesia, dramatically slashing tariffs on its exports to 19 per cent, down from the previously threatened 32 per cent, while unlocking full market access for American goods in the Southeast Asian nation.
Announcing the agreement on Truth Social, Trump said the pact was finalised after direct talks with Indonesian President Prabowo Subianto. “This landmark Deal opens up Indonesia’s entire market to the United States for the first time in History,” Trump wrote, adding that it marks a “complete and total access” win for US farmers, ranchers, and fishermen to a population of over 280 million.
As per Trump, Indonesia has pledged to purchase $15 billion worth of US energy, $4.5 billion in agricultural products, and 50 Boeing jets, many of them the long-haul 777 models. In return, Indonesian goods entering the US will face a flat 19 per cent tariff, while American exports to Indonesia will reportedly be exempt from both tariff and non-tariff barriers.
“If there is any transshipment from a higher tariff country, then that tariff will be added on to the tariff that Indonesia is paying,” Trump warned in his post, reinforcing provisions to avoid tariff circumvention.
The announcement came as part of Trump’s broader effort to reset global trade terms ahead of the August 1 deadline for elevated import levies.
As per Reuters, the Indonesia deal resembles recent US arrangements with Vietnam and the UK. Commerce secretary Howard Lutnick also told CNBC that the agreement “eliminates tariffs on US exports while imposing tariffs on imports.”
While Indonesia is not one of the US’s largest trading partners, bilateral trade totalled around $40 billion in 2024, it has been growing. Last year, the US recorded a nearly $18 billion goods trade deficit with Indonesia, importing items like palm oil, electronics, footwear, and rubber.
Indonesian official Susiwijono Moegiarso was quoted by Reuters as saying that both countries were preparing a joint statement detailing the agreed tariff and non-tariff arrangements.
The deal arrives amid mounting pressure on the US administration to finalise more such pacts, as Trump has sent tariff threat letters to over 20 countries last week, including Japan, South Korea, Brazil, and the EU. Talks with India are also reportedly progressing, with Trump noting, “We’re going to have access to India.”
Meanwhile, the European Union is preparing retaliatory tariffs worth over $84 billion if talks with the US fail, warning that Trump’s threatened 30 per cent duties on EU goods would upend bilateral trade.
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