Trump Strikes Trade Pact with Indonesia Amidst Global Tariff Tensions
US President eyes broader agreements as EU readies counter-measures
US President Donald Trump announced a significant trade agreement with Indonesia, marking another development in his administration’s assertive tariff policy. The deal aims to reshape trade dynamics, with Indonesia set to face levies while the US gains market access.
Indonesia Deal Details Emerge
President **Trump** declared the pact a “Great deal, for everybody,” tweeting directly from his social media platform, Truth Social. He indicated that the US would not impose tariffs on Indonesian goods under this specific arrangement. Conversely, Indonesian products entering the US market will be subject to a 19 percent tariff.
“They are going to pay 19 per cent and we are going to pay nothing … we will have full access into Indonesia, and we have a couple of those deals that are going to be announced,”
—Donald Trump, US President
The US imported nearly $US40 billion worth of goods from Indonesia in 2024. This trade relationship, while not among the top 15 for the US, has shown steady growth, with US exports increasing by 3.7 percent and imports by 4.8 percent last year, contributing to a US trade deficit of nearly $US18 billion.
Key US import categories from Indonesia last year included palm oil, electronics, footwear, car tires, natural rubber, and frozen shrimp. Indonesia’s government had confirmed it was preparing a joint statement to detail the reciprocal tariff arrangements.
EU Prepares Retaliatory Tariffs
This development occurs as the European Union is actively pursuing its own trade agreement with the US, signaling readiness to implement retaliatory measures should negotiations falter. The EU is preparing to target approximately 72 billion euros worth of US goods with potential tariffs if talks fail.
President **Trump** had previously threatened Indonesia with a 32 percent tariff, set to take effect on August 1. This threat was part of broader actions targeting numerous trading partners, including Canada, Japan, and Brazil, with tariffs ranging from 20 to 50 percent.
Framework agreements have already been established with the United Kingdom and Vietnam, and an interim deal reached with China to mitigate the impact of threatened tariffs. The US president’s strategy of imposing tariffs and then negotiating exemptions has become a hallmark of his trade policy.
The EU’s proposed countermeasures include duties on American products such as Boeing aircraft, bourbon whiskey, and automobiles. According to data from the U.S. Bureau of Transportation Statistics, over 42 million cars were sold in the US in 2023, highlighting the significant economic impact of potential trade disputes. Source: Bureau of Transportation Statistics
EU officials have expressed strong resolve to protect their businesses, indicating that failure to secure a deal with Washington could lead to significant trade disruptions.
Russia Trade Partners Warned
In separate developments, NATO Secretary-General **Mark Rutte** cautioned countries like Brazil, China, and India against continuing extensive business with Russia, warning of severe secondary sanctions. This warning followed President **Trump**’s announcement of increased military aid for Ukraine and the threat of substantial tariffs on buyers of Russian exports if a peace deal isn’t reached within 50 days.
“My encouragement to these three countries, particularly is, if you live now in Beijing, or in Delhi, or you are the president of Brazil, you might want to take a look into this, because this might hit you very hard,”
—Mark Rutte, NATO Secretary-General
Senator **Thom Tillis** expressed concern over the 50-day delay, fearing it could allow Russia to consolidate gains on the ground. The global trade landscape remains dynamic, with nations navigating complex negotiations and potential tariff escalations.
