In new deal, Trump keeps Indonesia tariff at 19%; country to buy 50 Boeing jets

Donald Trump announced that Indonesia has also committed to purchasing $15 billion in US energy and $4.5 billion in American agricultural products.

A week after announcing a 32 per cent tariff on Indonesia, US President Donald Trump on Tuesday announced a new deal with the Southeast Asian country, saying that he would impose a 19 per cent tariff on goods from Jakarta.

US President Donald Trump said he finalised the deal after speaking with his Indonesia counterpart Prabowo Subianto.(Reuters)

Taking to Truth Social, Trump said, "This morning I finalized an important Deal with the Republic of Indonesia after speaking with their Highly Respected President Prabowo Subianto. This landmark Deal opens up Indonesia’s ENTIRE MARKET to the United States for the first time in History."

US-Indonesia trade deal

He said that as part of the deal, Indonesia has committed to purchasing US energy worth $15 billion and American agricultural products amounting to $4.5 billion. The US President added that Indonesia will also purchase 50 Boeing jets, many of which would be the 777 aircraft model.

"For the first time ever, our Ranchers, Farmers, and Fishermen will have Complete and Total Access to the Indonesian Market of over 280 million people," he added.

Since the US and Indonesia reached a trade deal before the August 1 deadline, the Southeast Asian country will now pay a 19 per cent tariff on the goods they export to America.

"Indonesia will pay the United States a 19% Tariff on all Goods they export to us, while U.S. Exports to Indonesia are to be Tariff and Non Tariff Barrier FREE. If there is any Transshipment from a higher Tariff Country, then that Tariff will be added on to the Tariff that Indonesia is paying," the US President posted.

He thanked Indonesians for their "friendship and commitment" to balancing their trade deficit. "We will keep DELIVERING for the American people, and the People of Indonesia," Trump added.

This deal with the relatively minor trading partner of the US is among the handful of agreements struck so far by the Trump administration ahead of the August 1 deadline for tariffs on most US imports to rise again.

While detailed information about the deal is yet to be released, the rough outline provided by Trump reportedly resembled the framework agreement struck with Vietnam in recent weeks.

Indonesia's total trade deal with the US, just under $40 billion in 2024, does not rank in the top 15. However, it has been growing. Last year, US exports to Indonesia rose to 3.7 per cent, while imports were up by 4.8 per cent.

According to the US Census Bureau data on the International Trade Centre's TradeMap tool, the top US import categories from Indonesia last year were palm oil, electronics equipment, including data routers and switches, footwear, car tires, natural rubber and frozen shrimp.

Susiwijono Moegiarso, a senior official with Indonesia's Coordinating Ministry for Economic Affairs, told Reuters, "We are preparing a joint statement between US and Indonesia that will explain the size of reciprocal tariff for Indonesia including the tariff deal, non-tariff and commercial arrangements. We will inform (the public) soon."

The August 1 deadline on Trump's sweeping reciprocal tariffs gives the targeted countries time to crack a deal with Washington that could lower the threatened levies.

So far, framework agreements have been reached with Vietnam and the United Kingdom, and an interim deal has been made with China while negotiations continue to take place between Beijing and Washington.

Additionally, Trump said that negotiations with India were also moving in a similar direction.

"India basically is working along that same line. We're going to have access to India. And you have to understand, we had no access into any of these countries. Our people couldn't go in. And now we're getting access because of what we're doing with the tariffs," he said.