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US President Donald Trump says he has struck a trade pact with Indonesia resulting in significant purchase commitments from the south-east Asian country, after negotiations to avoid steeper tariffs.
Indonesian goods entering the United States would face a 19% tariff, Trump said in a post on his Truth Social platform. This is significantly below the 32% level the president earlier threatened.
“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,” Trump wrote.
Boeing shares closed down 0.2% after the announcement.
“They are going to pay 19% and we are going to pay nothing … we will have full access into Indonesia, and we have a couple of those deals that are going to be announced,” Trump said outside the Oval Office earlier.
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.
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 to avoid the US president’s tariff plans.
But Trump has so far only unveiled other deals with Britain and Vietnam, alongside an agreement to temporarily lower tit-for-tat levies with China.
Last week, Trump renewed his threat of a 32% levy on Indonesian goods, saying in a letter to the country’s leadership that this would take effect 1 August.
It remains unclear when the lower tariff level announced on Tuesday will take effect for Indonesia. The period over which its various purchases will take place was also not specified.
Trump said on social media that under the deal, which was finalised after he spoke with Indonesian president Prabowo Subianto, goods that have been transshipped to avoid higher duties would face steeper levies.
He separately told reporters that other deals were in the works, including with India, while talks with the European Union are continuing.
Indonesia’s former vice minister for foreign affairs, Dino Patti Djalal, told a Foreign Policy event Tuesday that government insiders had indicated they were happy with the new deal.
Trump in April imposed a 10% tariff on almost all trading partners, while announcing plans to eventually hike this level for dozens of economies, including the EU and Indonesia.
But days before the steeper duties, customised to each economy, were due to take effect, he pushed the deadline back from 9 July to 1 August. 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.
Agence France-Presse and Reuters contributed to this report
