Trump cuts tariffs in new Indonesia deal, secures Boeing sales

By Al Mayadeen English
Source: News websites
16 Jul 2025 10:01
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The US and Indonesia reach a trade deal as Trump delays sweeping tariff hikes and seeks to boost American exports ahead of August’s trade policy shift.

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An employee counts US dollar banknotes using a machine at a money changer in Jakarta, Indonesia, Tuesday, April 8, 2025. (AP)

US President Donald Trump has unveiled a new trade agreement with Indonesia that includes reduced tariffs on Indonesian imports and large-scale purchases of American goods, including Boeing aircraft and agricultural products.

In a statement published on his Truth Social account, Trump confirmed that Indonesian goods entering the US will now face a 19% tariff, significantly lower than the previously proposed 32%. “They are going to pay 19% and we are going to pay nothing … we will have full access into Indonesia,” Trump said outside the Oval Office.

According to the US president, the agreement follows a direct conversation with Indonesian President Prabowo Subianto and features a series of key commitments from Jakarta. These include $15 billion in energy imports from the US, $4.5 billion in American agricultural goods, and the purchase of 50 Boeing aircraft, “many of them 777’s.” Despite the announcement, Boeing’s stock closed slightly lower on the day, down 0.2%.

Trump did not specify the timeline for when the tariff reduction and purchase agreements would take effect, but warned that transshipped goods intended to bypass higher US duties would face steep penalties.

Wider context

Indonesia, while not among Washington’s top 15 trade partners, posted a goods trade surplus of nearly $18 billion with the US in 2024. Bilateral trade has continued to grow steadily, with American exports to Indonesia rising 3.7% last year and imports increasing by 4.8%.

The new deal comes as part of a broader effort by the Trump administration to secure bilateral trade agreements and deliver on promises of reshaping global commerce. In recent months, the White House has finalized trade deals with Britain and Vietnam and reached a temporary tariff easing in its dispute with China.

Back in April, Trump imposed a 10% tariff on nearly all trading partners and laid out plans for country-specific hikes. Those increases, initially set to take effect on July 9, have now been postponed to August 1. More than 20 countries, including the European Union, Japan, South Korea, and Malaysia, have received formal notifications of the updated tariff rates.

At a recent event hosted by Foreign Policy, Indonesia’s former vice foreign minister Dino Patti Djalal remarked that government sources were “happy with the new deal,” suggesting quiet satisfaction in Jakarta over the negotiated terms.

Trump, meanwhile, indicated that more announcements may follow soon. “We have a couple of those deals that are going to be announced,” he said, mentioning ongoing trade talks with both India and the EU.