US President Donald Trump has announced a trade agreement with Indonesia that includes a 19% tariff on Indonesian goods, significantly lower than the 32% he had previously threatened. The deal also involves commitments from Indonesia to purchase $15bn in US energy, $4.5bn in agricultural products, and 50 Boeing jets, many of them 777s.
Trump made the announcement on his Truth Social platform, stating that under the agreement, the US would have full access to the Indonesian market while paying no tariffs. The timeline for implementation remains unclear, as does the period over which the purchases will take place.
Indonesia's total trade with the US was just under $40bn in 2024, with the US running a goods trade deficit of nearly $18bn. The Trump administration has been under pressure to finalise trade pacts, having previously announced deals with Britain and Vietnam, as well as a temporary truce with China.
Last week, Trump renewed his threat of a 32% levy on Indonesian goods, set to take effect on 1 August. It is not yet known when the lower 19% rate will apply. Trump also warned that goods transshipped to avoid higher duties would face steeper levies.
Former Indonesian vice minister for foreign affairs Dino Patti Djalal indicated that government insiders were pleased with the new deal. Trump has sent similar tariff letters to over 20 partners, including the EU, Japan, South Korea, and Malaysia, as part of his broader trade strategy.
