Indonesia and US Continue Trade Talks After Tariffs Deal, Garuda Jets Deal in the Works

Indonesia will continue negotiations with the US on sectoral tariffs, jet purchases, and critical minerals after securing a 19% baseline tariff rate on exports. The country will maintain talks on enhancing business interactions, diversifying the US critical mineral supply chain, and negotiating sector-specific tariffs on aluminum and steel products. PT Garuda Indonesia plans to purchase Boeing jets, but a formal deal has yet to be announced. The tariffs deal erases duties on US imports to Indonesia and includes plans to buy over $19 billion of American energy and agricultural products.

Indonesia has secured a 19% baseline tariff rate on its exports to the US, and the country is committed to continuing negotiations on sectoral tariffs, jet purchases, and critical minerals. This comes after a significant agreement between President Donald Trump and President Prabowo Subianto, which also includes plans for Indonesia to buy over $19 billion of American energy and agricultural products [1].

The Indonesian government, through Mari Elka Pangestu, an adviser to President Prabowo Subianto on international trade, has expressed a willingness to enhance business interactions and help diversify the US's critical mineral supply chain. This includes negotiating sector-specific tariffs on aluminum and steel products [1]. The ongoing discussions also cover PT Garuda Indonesia's plans to purchase Boeing jets, with the airline aiming to buy 50 or more jets as part of its financial turnaround [1].

The agreement with the US follows a broader trend of the country balancing its economic ties between the US and China, with Southeast Asia playing a crucial role in global trade dynamics amidst rising geopolitical tensions [1]. Indonesia will continue to discuss other components of the trade deal, aiming to secure more benefits for itself [1].

Separately, the US has indicated it may implement tariffs on pharmaceuticals and semiconductors by the end of July, potentially coinciding with broader "reciprocal" tariffs set for August 1 [2]. This could impact the ongoing negotiations between Indonesia and the US, as well as other countries involved in similar discussions.

In related news, the US Department of Defense (DoD) has entered into a significant partnership with MP Materials to expand domestic supply chains for rare earth elements, particularly neodymium and praseodymium (NdPr), which are critical for various industries, including defense and renewable energy [3]. The partnership involves both supply-side and demand-side policy tools, such as equity investments, price floor commitments, and offtake commitments, to support MP Materials' expansion [3].

References:
[1] https://www.bloomberg.com/news/articles/2025-07-17/indonesia-to-keep-discussing-jets-minerals-with-us-after-19-trump-tariff-deal
[2] https://finance.yahoo.com/video/trump-signals-aug-1-tariffs-054355379.html
[3] https://fas.org/publication/unpacking-dod-and-mp-partnership/