US President, Donald Trump has struck a trade deal with Indonesia, resulting in significant purchase commitments from the Southeast Asian country.
The deal follows negotiations to avoid steeper US tariffs. Trump said in a post on his Truth Social platform that the agreement imposes a 19 percent tariff on Indonesian goods entering the US.
Under the deal, which was finalised after Trump spoke with Indonesian President Prabowo Subianto, goods that have been transshipped to avoid higher duties will face steeper levies.
Trump added that as part of the agreement, Indonesia has committed to purchasing $15 Billion Dollars in US Energy, $4.5 Billion Dollars in American Agricultural Products, and 50 Boeing Jets, many of them 777’s.
In a separate post, Trump touted the finalised pact as a “great deal, for everybody.”
Last week, Trump renewed his threat of a 32 percent levy on Indonesian goods, saying in a letter to the country’s leadership that this level would take effect on August 1.
It remains unclear when the lower tariff level announced will take effect for Indonesia.The period over which the various purchases will take place was also not specified.
Indonesian former Vice Minister for Foreign Affairs, Dino Patti Djalal told a Foreign Policy magazine event that government insiders had indicated that they were happy with the new deal.
Indonesia’s total trade with the US – totalling just under $40bn in 2024 – does not rank in the top 15, but it has been growing.
US exports to Indonesia rose 3.7% last year, while imports from there were up 4.8%, leaving the US with a goods trade deficit of nearly $18bn.
Separately, Trump said that he would soon begin notifying smaller countries of their new tariff rate, which would likely be a “little over 10 percent,” and that an earlier trade deal with Vietnam was “pretty well set.”
While Trump announced earlier this month that he had struck a preliminary trade deal with Hanoi, the details of the pact, including how Washington will define illegal transshipments that will be subject to a 40 percent levy, have not been released.
Trump downplayed the importance of releasing details of the agreement but said he would consider it.
He also told reporters that other deals are in the works, including with India, while talks with the European Union are continuing.
Trump Administration Under Pressure To Finalize Trade Deals
The Trump administration has been under pressure to wrap up trade pacts after promising a flurry of deals recently, as countries sought talks with Washington, DC to avoid Trump’s tariff plans.
When Trump first postponed tariffs on April 2, the White House said that it would have 90 deals in 90 days.
However, the US President has so far only unveiled other deals with the United Kingdom and Vietnam, alongside an agreement to temporarily lower tit-for-tat levies with China.
Trump in April imposed a 10 percent tariff on almost all trading partners, while announcing plans to eventually hike this level for dozens of economies, including the EU and Indonesia.
Last week, days before the steeper duties were due to take effect, he pushed the deadline back from July 9 to August 1. This marked his second postponement of the elevated levies.
Instead, since early last week, Trump has been sending letters to partners, setting out the tariff levels they would face come August.
So far, he has sent more than 20 such letters, including to the EU, Japan, South Korea and Malaysia.
Trump has unveiled blanket tariffs on trading partners in part to address what his administration deems as unfair practices that hurt US businesses.
Canada and Mexico, both countries that were not originally targeted in Trump’s “reciprocal” tariff push in April, also received similar documents outlining updated tariffs for their products.
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