In a significant trade breakthrough, Trump and Prabowo finalized a trade deal that reduced US tariffs on Indonesian goods to 19%. This agreement follows Trump’s earlier threat of imposing a steep 32% tariff on Indonesian imports, which started on August 1.
After a direct phone call with President Prabowo, Trump agreed to lower the proposed rate in exchange for greater US access. Indonesia will now allow duty-free entry for US goods, including agriculture and manufactured products previously restricted by high tariffs.
Additionally, Indonesia committed to buying $15 billion in American energy and $4.5 billion worth of US agricultural commodities. The deal also includes purchasing 50 Boeing aircraft, although specific delivery timelines were not publicly disclosed.
President Prabowo described the accord as marking a new era of mutual benefit between Indonesia and the United States. The agreement follows a series of similar pacts Trump has struck with countries like Vietnam, China, and the United Kingdom.
Despite these deals, many nations still face uncertainty due to Trump’s threat of raising tariffs again from August 1. White House officials confirmed that dozens of other countries will soon receive letters with their expected tariff rates.
The administration maintains that these blanket tariffs are part of efforts to reduce America’s trade deficit and boost local industry. Indonesia ranks among America’s top 25 trade partners, sending nearly $28 billion of goods to the US in 2024.
Key imports from Indonesia include palm oil, footwear, frozen shrimp, electronics, natural rubber, and automotive tires. Trump later said that more deals would follow, and tariffs on pharmaceuticals may be next in the pipeline.
