Trump announces historic deal granting US tariff-free access to Indonesia’s market; Indonesia to levy 19% tariff on US goods

Trump announces historic deal granting US tariff-free access to Indonesia’s market; Indonesia to levy 19% tariff on US goods

US President Donald Trump announced a historic trade agreement with Indonesia, which will grant the United States tariff-free access to Indonesia's market. In a post on Truth Social, Trump stated that the deal was "great for everybody" and that he had directly negotiated with Indonesian President Prabowo Subianto [1][2].

Under the terms of the agreement, Indonesia will levy a 19% tariff on US goods, while US exports to Indonesia will remain tax-free. This agreement marks a significant shift from Trump's earlier threat to impose a 32% tariff on Indonesian exports, which had been set to take effect on August 1 [1][3].

The announcement comes on the heels of similar deals Trump has struck with Vietnam and the UK, as well as a tariff truce with China. These agreements have been criticized for lacking specific details and for being announced before formal acceptance by the respective governments [2][3].

Indonesia, one of the United States' top 25 trade partners, traded more than $38 billion in goods with the US in 2024. The US trade deficit with Indonesia totaled $17.9 billion last year [1]. The Indonesian government is preparing a joint statement with the US that will detail additional information, including non-tariff measures and commercial agreements [3].

The agreement with Indonesia is the fourth trade framework Trump has announced with foreign governments. 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 [3].

Markets responded positively to the news, with the iShares MSCI Indonesia ETF rising as much as 0.7% on Tuesday morning New York time [3]. However, the lack of specific details in Trump's announcement has left investors and financial professionals on edge, as previous deals have fallen short of full-fledged trade agreements with many details left to be negotiated later [2][3].

References:
[1] https://www.cnbc.com/2025/07/15/trump-indonesia-trade-tariffs.html
[2] https://www.cryptopolitan.com/trump-announces-us-indonesia-trade-deal/
[3] https://www.bloomberg.com/news/articles/2025-07-15/trump-says-deal-struck-with-indonesia-without-providing-details