Trump Secures New Tariff Pact with Indonesia
US President Claims Favorable Terms, Lowered Duties
President **Donald Trump** has announced a new tariff agreement with Indonesia, stating a deal has been struck to significantly reduce threatened duties on goods entering the United States.
Trade Deal Details Emerge
The US leader indicated that tariffs on Indonesian products would be set at 19%, a reduction from earlier threats. In exchange, **Trump** claimed the agreement grants American companies “full access” to the Indonesian market.
Indonesia’s government has yet to officially confirm the terms of this pact. The southeast Asian nation maintains a growing trade relationship with the US, exporting approximately $28 billion worth of goods last year, including apparel, footwear, and palm oil.
Escalating Tariff Threats
This development follows a series of tariff announcements by the White House in recent months, which have spurred numerous trade negotiations. **Trump** had previously suspended more aggressive tariff plans earlier in the year but revived threats this month, issuing warning letters to numerous countries about impending high tariffs, set to take effect from August 1st.
These warnings targeted major trading partners, including the European Union, Canada, Mexico, Japan, and South Korea. Indonesia also received a notification last week outlining a potential 32% tariff, a move that reportedly surprised officials who believed an agreement was imminent.
According to **Trump**, the revised 19% rate was finalized following a phone conversation with the Indonesian president. He stated that the nation would also lower its own tariffs on American products, which the US has previously cited as being high for many agricultural and manufactured goods.
“They are going to pay 19% and we are going to pay nothing … we will have full access into Indonesia.”
—Donald Trump, US President
Further details shared by **Trump** on social media indicate Indonesia’s commitment to purchasing $15 billion in US energy products, $4.5 billion in American agricultural goods, and 50 Boeing aircraft. These figures are reportedly lower than those anticipated in a previously reported trade deal.
Global Trade Dynamics Shift
This agreement with Indonesia marks one of only a few announced by the administration, alongside deals with the UK, China, and Vietnam. However, in those previous instances, significant US tariffs remained in place, with key issues and terms left unconfirmed or unresolved.
The shifting landscape of global trade talks is evident, with some experts observing a recalibration of expectations by various nations.
“The tone is changing a lot.”
—Everett Eissenstat, Partner at Squire Patton Boggs
Everett Eissenstat, a partner at Squire Patton Boggs and former economic adviser, anticipates more such deals emerging. He noted recent comments from Canadian Prime Minister **Mark Carney** suggesting a willingness to accept tariff levels previously considered unacceptable, highlighting a broader trend of diplomatic engagement.
Eissenstat commented on the importance of negotiation, stating, “For governments, I think it’s best to be at the negotiating table rather than to walk away.”
This sentiment underscores the prevailing strategy of seeking resolutions, even amidst challenging trade environments. For context, as of early 2024, the US tariff revenue collection on imported goods was projected to exceed $100 billion annually, underscoring the significant financial implications of these trade policies (Congressional Budget Office, 2024 projections).
