Trump Secures Indonesian Trade Deal, Averting Higher Tariffs
Jakarta Commits to Billions in US Goods to Avoid Escalating Duties
WASHINGTON – President **Donald Trump** announced a new trade pact with Indonesia on July 15, securing significant purchase commitments from the Southeast Asian nation and sidestepping threats of punitive tariffs.
Indonesia to Purchase Billions in US Products
Under the agreement, Indonesian imports into the United States will face a 19 percent tariff, a reduction from the 32 percent the President had previously warned about. This deal comes as the Trump administration faces pressure to finalize trade agreements.
“As part of the agreement, Indonesia has committed to purchasing US$15 billion (S$19 billion) in US energy, US$4.5 billion in American agricultural products, and 50 Boeing jets, many of them 777s,” Trump stated on his Truth Social platform.
Boeing Shares Dip Amid Trade News
Following the announcement, shares of aerospace giant Boeing closed down by 0.2 percent.
Trump’s Tariff Strategy Continues
The Trump administration has been actively pursuing trade deals, with recent agreements including those with Britain and Vietnam, alongside a temporary reduction in levies with China. The President had renewed his threat of a 32 percent tariff on Indonesian goods, with an August 1 deadline looming.
It remains unclear when the newly agreed-upon lower tariff rate will be implemented for Indonesia, nor has the timeframe for the country’s purchases been specified.
“As part of the agreement, Indonesia has committed to purchasing US$15 billion (S$19 billion) in US energy, US$4.5 billion in American agricultural products, and 50 Boeing jets, many of them 777s.”
—Donald Trump, US President
The pact was finalized after discussions between President **Trump** and Indonesian President **Prabowo Subianto**. President **Trump** also indicated that goods transshipped to circumvent higher duties would face stricter levies.
Broader Trade Negotiations Underway
President **Trump** also indicated that further trade agreements are in development with countries like India, while discussions with the European Union are ongoing.
Dino Patti Djalal, Indonesia’s former vice-minister for foreign affairs, expressed satisfaction with the deal, citing positive feedback from government insiders.
In April, President **Trump** imposed a 10 percent tariff on most trading partners, with plans to increase this for many economies, including Indonesia. The deadline for these higher duties had been postponed twice, first from July 9 to August 1.
The President has been issuing letters to trade partners detailing their upcoming tariff levels, with over 20 countries, including the EU, Japan, South Korea, and Malaysia, having received such notifications. Canada and Mexico also received updated tariff outlines.
However, existing exemptions for goods entering the US under the North American trade pact are expected to remain in place, according to a US official.
Analysts suggest that the success of President **Trump**’s trade strategy hinges on the finalization of these agreements.
“In the public’s mind, the tariffs are the pain, and the agreements will be the gain. If there are no agreements, people will conclude his strategy was flawed.”
—William Reinsch, Senior Adviser at the Centre for Strategic and International Studies
The United States’ trade deficit with Indonesia was approximately $10.9 billion in goods in 2023, according to the Office of the United States Trade Representative (USTR).
