JakartaGlobe-July 16, 2025
US President Donald Trump had just announced that he would slash the promised 32 percent tariffs to 19 percent on Indonesian goods. In exchange, Indonesia agreed to give the US tariff-free access to its market, according to Trump. In a Truth Social post, Trump wrote that he had “finalized an important deal” with Indonesia after speaking with the country’s president Prabowo Subianto. He announced all Indonesian goods entering the American market would be subject to 19 percent tariffs, but Southeast Asia’s largest economy could face a penalty rate if deemed as transshipments. “This landmark deal opens up Indonesia’s entire market to the US for the first time in history,” Trump said on Tuesday. “US exports to Indonesia are 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.” Trump said that Indonesia had committed to purchasing $15 billion worth of US energy and $4.5 billion in American agricultural products. Indonesia would also buy 50 Boeing jets, many of them being the Boeing 777 wide-body airliners. “For the first time ever, our ranchers, farmers, and fishermen will have complete and total access to the Indonesian market of over 280 million,” Trump wrote. The Indonesian government has yet to issue an official statement on the latest deal. Indonesia managed to secure a tariff lower than Vietnam, although both ASEAN members will still face higher levies on transshipments. The latest developments were only a week after Trump told Prabowo via a poorly formatted letter that he would impose a 32 percent tariff unless Jakarta made some concessions in trade. He gave Prabowo a negotiating window until August 1, although Indonesian goods had already been subject to the 10 percent baseline tariff since April. Indonesia not long ago unveiled its plans to sign some memoranda of understanding (MoUs) worth up to $34 billion with American business partners as a sweetener in the tariff talks. State-run oil firm Pertamina has inked some of those documents with energy giants like ExxonMobil and Chevron. Trump’s tariff blitz is part of Trump’s strategy to fix Washington’s trade imbalance. The US reported that it had run a $17.9 billion trade deficit with Indonesia last year. Read more at: https://jakartaglobe.id/business/aseanchina-trade-pact-may-not-mean-southeast-asia-picks-xi-over-trump?
