U.S.-Indonesia Trade Deal: Tariff Reduced to 19%

The United States has signed a new trade agreement with the Southeast Asian nation of Indonesia, as announced by U.S. President Donald Trump. Under the agreement, the proposed tariff on Indonesian imports to the U.S. has been reduced from 32% to 19%.

President Trump stated that the deal was finalized through a direct telephone conversation with Indonesian President Joko Widodo, also known as Prabowo Subianto. However, Indonesia has not yet made any official statement regarding the agreement.

According to a report published by the BBC on Wednesday, July 16, the deal grants American companies “full market access” to Indonesia. In return, Indonesia has pledged to purchase $15 billion worth of energy, $4.5 billion in agricultural products, and 50 aircraft from Boeing.

Earlier in April, the White House issued a series of high-tariff warnings. The Trump administration announced that countries failing to reach a trade agreement with the U.S. would face increased tariffs starting August 1. The list included major trade partners such as the European Union, Canada, Mexico, Japan, South Korea, and Indonesia.

Trump commented, “They’ll pay a 19% tariff, and we’ll give nothing. We’re getting full access to their market.” Stephen Marks, an economics professor at Pomona College in California, noted that the deal offers more political than economic benefits for Indonesia. “In terms of overall trade, the U.S. is important to Indonesia but not on the level of China or Japan,” he said.

Besides Indonesia, the U.S. has also signed trade deals with the United Kingdom, China, and Vietnam. However, many of these agreements still retain high tariffs, and several key issues remain unresolved, limiting the full benefits of the deals.