Indonesia and US Sign $19B Trade Deal: Indonesia to Face 19% Tariff and Buy 50 Boeing Jets

President Trump announces a new trade deal with Indonesia, where the country will face a 19% tariff on exports to the US, significantly lower than the 32% initially threatened. In return, Indonesia will remove all duties on US exports and purchase 50 Boeing jets in a $19 billion deal.

President Donald Trump has announced a new trade deal with Indonesia, which will see the Southeast Asian nation face a 19% tariff on exports to the United States. This agreement is significantly lower than the 32% initially threatened by the U.S. administration [1]. In exchange, Indonesia has agreed to remove all duties on U.S. exports and has committed to purchasing 50 Boeing jets in a deal valued at $19 billion [3].

The agreement was reached after direct talks between Trump and Indonesian President Prabowo Subianto. Subianto described the negotiations as tough but fair, and suggested a follow-up trip to Washington this fall [3]. The deal marks Trump's fourth trade agreement announcement in the past three months, although the administration has promised to make several more deals that have yet to materialize [4].

The new tariff rate of 19% is the second-lowest in the region, with only Singapore having a lower rate. This deal is expected to provide a boost to Indonesia's labor-heavy sectors such as textiles and palm oil, which currently account for around 2% of the country's GDP but support a significant number of jobs [3].

The Indonesian central bank moved quickly to cut interest rates following the announcement, signaling its readiness to ease further if needed. The government recently trimmed its growth outlook to 5% for the year, citing trade risks. While the tariff news helps stabilize sentiment, analysts caution that the full macroeconomic impact remains unclear without knowing when the purchases will materialize or how the U.S. might respond in an election year [3].

This trade deal comes amidst ongoing negotiations with India, which has not yet received a tariff letter. If a deal is reached, it is likely to be lower than the threatened 26% duty rate from April 2 [1]. The National Retail Federation (NRF) has reported that 67% of back-to-school shoppers have already started buying items for the upcoming school year, citing concerns about price increases due to tariffs [1].

References:
[1] https://wwd.com/footwear-news/shoe-industry-news/tariff-trump-indonesia-trade-deal-shoe-imports-1237981933/
[2] https://www.marketscreener.com/news/latest/President-Trump-Touts-US-Indonesia-Trade-Deal-50523033/
[3] https://www.tradingview.com/news/gurufocus:84c120369094b:0-trump-locks-in-19-tariff-deal-with-indonesia-boeing-wins-massive-jet-order/
[4] https://www.cnn.com/2025/07/15/economy/trump-says-trade-deal-with-indonesia