Indonesia has reached a trade agreement with the United States that lowers proposed U.S. tariffs on Indonesian exports from 32% to 19%, following direct negotiations between Presidents Prabowo Subianto and Donald Trump. The deal, which includes major purchase commitments, is seen as a strategic win.
President Prabowo Subianto reportedly spoke directly with President Trump to finalise the terms, which include Indonesia's commitment to buy 50 Boeing aircraft and billions in U.S. energy and agricultural products. The deal also mirrors elements of a recent U.S.-Vietnam agreement, including provisions against Chinese transshipments.
Analysts say while non-oil sectors such as textiles may face some pressure, energy and agriculture will benefit, and the reduced tariffs could boost investor confidence and ease monetary policy conditions. Indonesian markets responded positively to the announcement, with the Jakarta stock index rising by 0.7%.
“Great deal, for everybody, just made with Indonesia. I dealt directly with their highly respected President,” Trump said on social media, referring to Indonesian President Prabowo Subianto.
In a follow-up post, Trump detailed key terms of the agreement, saying Jakarta had agreed to buy $15 billion worth of U.S. energy, $4.5 billion in American agricultural products, and 50 Boeing aircraft.
He added that U.S. exports would face no tariff or non-tariff barriers, describing it as “complete and total access” for American farmers, ranchers and fishermen to Indonesia’s 280 million-strong market.
However, Indonesians on Wednesday questioned the fairness of their country’s trade deal with the U.S.
"It's not fair that we (who export to the U.S.) are charged 19% while they (the U.S.) are asked for zero per cent, in my opinion this is not fair at all,” said Mulyadi, an employee for a securities firm.
Indonesia said the trade deal with the United States was reached after an "extraordinary struggle" in negotiations.
The announcement comes just ahead of the 1 August deadline for countries to finalise trade deals with Washington or face increased tariffs. Originally set for 9 July, the deadline was extended by The White House to allow more time for talks.
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