The United States has reached a trade agreement with Indonesia that will see the Southeast Asian nation commit to major purchases of American goods in exchange for lower tariffs, President Donald Trump announced Tuesday.
Under the deal, Indonesian exports to the U.S. will face a 19% tariff—significantly below the 32% rate Trump had previously threatened to impose starting August 1. The agreement was finalized during a phone call between Trump and Indonesian President Prabowo Subianto.
Key Commitments
Trump said Indonesia has agreed to buy $15 billion in U.S. energy products, $4.5 billion in agricultural goods, and 50 Boeing jets, including several 777 models. The announcement briefly lifted Boeing shares, though they closed slightly down by 0.2%.
Indonesian presidential spokesman Hasan Nasbi confirmed the agreement Wednesday, calling it “progress that cannot be called small” and praising the direct negotiations between the two leaders. Former Indonesian Vice Foreign Minister Dino Patti Djalal also indicated that officials were satisfied with the terms.
Tariff Postponements and Ongoing Talks
The deal comes as the Trump administration races to finalize trade pacts before steep tariffs take effect. Last week, Trump sent letters to more than 20 trading partners—including the EU, Japan, and South Korea—detailing proposed tariff hikes. However, he has twice delayed their implementation, now pushing the deadline to August 1.
Trump told reporters that additional agreements are being negotiated, including with India, while discussions with the European Union continue.
Mixed Reactions and Economic Implications
While the White House frames the deal as a win for American industries, critics warn that Trump’s tariff-driven strategy risks alienating trade partners without securing long-term benefits. William Reinsch of the Center for Strategic and International Studies cautioned that without visible trade gains, the public may view the policy as flawed.
Indonesia, meanwhile, avoids the economic blow of higher U.S. tariffs but must now fulfill its purchase commitments amid global market uncertainties. The timeline for these transactions remains unspecified.
The agreement marks Trump’s latest effort to reshape U.S. trade relations, following recent pacts with Britain and Vietnam, as well as a temporary truce in tariff escalations with China. Whether the strategy yields broader success will depend on forthcoming negotiations with other major economies.
