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Trump Agrees to 19% Tariff Rate with Indonesia in Trade Deal
ByAinvest
Tuesday, Jul 15, 2025 10:14 pm ET1min read
US President Donald Trump announced a trade deal with Indonesia, reducing the "reciprocal" tariff rate from 32% to 19%. Indonesia committed to buying $15 billion of US energy, $4.5 billion of American agricultural products, and 50 Boeing jets. American exports to Indonesia will be free of tariffs and nontariff barriers. The deal aims to boost US-Indonesia trade and investment ties.
US President Donald Trump has announced a significant trade deal with Indonesia, reducing the "reciprocal" tariff rate from 32% to 19%. The deal, which Trump described as "great for everybody," was finalized following direct negotiations with Indonesian President Prabowo Subianto [1].Under the agreement, Indonesia has committed to purchasing $15 billion in US energy, $4.5 billion in American agricultural products, and 50 Boeing jets. Notably, American exports to Indonesia will be free of tariffs and nontariff barriers, aiming to boost US-Indonesia trade and investment ties [2].
The Indonesian government has expressed satisfaction with the new deal, with former vice minister for foreign affairs, Dino Patti Djalal, indicating happiness with the agreement [2]. The deal, however, remains subject to further details regarding the timeline for implementation and the specific terms of the Boeing purchases.
The Trump administration has been under pressure to wrap up trade pacts, with countries seeking talks to avoid the president's threatened tariffs. This deal follows similar agreements with Vietnam and Britain, although the details and acceptance of these deals have been subject to some controversy [1].
The new tariff rate of 19% is significantly lower than the initial threat of 32%, indicating a potential shift in Trump's trade strategy. However, the specific period over which Indonesia's various purchases will take place remains unclear, and the implementation timeline for the lower tariff level is yet to be announced [2].
This trade deal marks a strategic move by the Trump administration to strengthen economic ties with key trade partners and potentially alleviate some of the pressure on US businesses from unfair trade practices. The deal also underscores Trump's ongoing efforts to promote US companies, particularly in the aerospace and energy sectors.
References:
[1] https://www.cnbc.com/2025/07/15/trump-indonesia-trade-tariffs.html
[2] https://www.theguardian.com/us-news/2025/jul/16/trump-says-indonesia-to-pay-19-tariffs-buy-50-boeing-jets-under-trade-deal
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