U.S. President Donald Trump on Tuesday announced a new trade agreement with Indonesia that imposes a 19% tariff on Indonesian goods entering the American market. The deal is part of a sweeping effort by the Trump administration to revamp existing trade frameworks and reduce the United States’ persistent trade deficit through aggressive bilateral negotiations.
According to Trump, the agreement also includes major purchase commitments from Jakarta. On his social media platform Truth Social, Trump claimed Indonesia had agreed to buy $15 billion worth of U.S. energy products, $4.5 billion in agricultural goods, and 50 Boeing aircraft, although he did not specify a timeline for these transactions.
Under the new arrangement, U.S. exports to Indonesia will be free from both tariff and non-tariff barriers, Trump said. “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,” he wrote, calling it a “historic win for American workers and businesses.”
A Shift in U.S. Trade Strategy
The Indonesia deal follows a similar framework agreement signed recently with Vietnam and is part of a broader Trump administration strategy to pressure trading partners into bilateral deals. The administration has set a firm deadline of August 1, after which increased import tariffs—ranging from 20% to 50%—will automatically apply to countries without new trade arrangements in place.
Indonesia had been facing the threat of a 32% tariff unless a deal was reached. Similar tariff warning letters have been sent to over two dozen countries, including major economies like Canada, Japan, and Brazil.
Jakarta Confirms Agreement in Progress
In response, Susiwijono Moegiarso, Secretary General at Indonesia’s Coordinating Ministry for Economic Affairs, confirmed ongoing negotiations and said a joint statement outlining the finalized terms would be released soon. “We will inform [the public] soon,” he told Reuters via text.
Indonesia is not among the top 15 U.S. trading partners, but bilateral trade has seen consistent growth. In 2024, the total trade volume between the two countries approached $40 billion, with the U.S. registering a goods trade deficit of nearly $18 billion. Indonesia’s major exports to the U.S. include palm oil, rubber, footwear, electronics, tires, and frozen seafood.
Market Reactions and Global Implications
The latest deal adds to a series of limited agreements the Trump administration has secured ahead of the tariff deadline, including with the United Kingdom, Vietnam, and a partial tariff ceasefire with China. However, major trading blocs like the European Union remain at an impasse, raising the risk of escalating trade tensions.
As the August 1 deadline nears, international markets are watching closely. The possibility of a broader tariff regime has prompted both concern and hurried negotiations in global trade circles, with Washington signaling a clear preference for one-on-one deals over multilateral arrangements.
Whether these new deals will significantly shift the U.S. trade balance remains to be seen—but for now, Trump’s tariff-first doctrine is reshaping the global trade landscape.
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