US President Donald Trump on July 15 said he has reached an agreement with Indonesia under which goods from the country will be levied a tariff rate of 19 percent, Bloomberg reported, adding that US exports will face zero tax.
“They are paying 19 percent and we are not paying anything,” Trump told reporters on July 15 at the White House. “We are going to have full access to Indonesia.”
Trump, in a post on Truth Social, announced that Indonesia will buy 50 Boeing jets along with US energy and agricultural goods worth billions of dollars. Moreover, the US farmers will have “complete and total access” to the Indonesian market, the President revealed.
Last week, Trump sent tariff letters to several trading partners, increasing pressure on negotiators ahead of an August 1 deadline for higher duties to take effect.
The agreement with the Southeast Asian country will be the first to be struck out of all the countries Trump had written letters to reduce tariffs. Indonesia was among those who had received the letters, and was threatened with 32 percent tariff.
The US President had earlier during the day announced on social media that a deal has been reached with Indonesia, but did not provide any details. He said he dealt directly with Indonesian President Prabowo Subianto to finalize the deal.
Indonesia is preparing a joint statement with the US that will detail additional information, including non-tariff measures and commercial agreements, Coordinating Ministry for Economic Affairs Secretary Susiwijono Moegiarso said in a text message late Tuesday in Jakarta.
Indonesia’s top negotiator Minister Airlangga Hartarto last week met with US officials, including Trade Representative Jamieson Greer, Commerce Secretary Howard Lutnick and Treasury Secretary Scott Bessent, to hash out an improved deal.
Southeast Asia’s largest economy had earlier proposed near-zero tariffs on about 70 percent of US imports, as well as business deals in critical minerals, energy, agriculture and defense, but that failed to convince Trump to lower the levy on Indonesian goods from the 32 percent rate he first set back in April.
Markets have been in wait-and-see mode on Trump’s trade proclamations, given he has changed rates and deadlines multiple times since he announced country-by-country tariffs on April 2 and then quickly paused them. The iShares MSCI Indonesia ETF rose as much as 0.7 percent Tuesday morning New York time after Trump’s post, while the S&P 500 was little changed.
An agreement with Indonesia would be the fourth trade framework Trump has announced with foreign governments, after Vietnam and the UK. The US and China also reached a tariff truce that includes the planned resumption of critical minerals and technology trade between the world’s two largest economies.
The pacts have thus far fallen short of full-fledged trade deals, with many details left to be negotiated later. Trump provided no paper to back up last week’s claim of a deal with Vietnam. The country’s leadership was caught off guard by Trump’s declaration that Hanoi agreed to a 20 percent tariff, and the Vietnamese government is still seeking to lower the rate, according to people familiar with the matter.
With Bloomberg inputs
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