Trump Announces Trade Deal with Indonesia: Tariffs Reduced and Major U.S. Exports Secured

U.S. President Donald Trump has announced a new trade agreement with Indonesia, reached following a phone call with President Prabowo Subianto. The deal lowers the reciprocal tariff rate from 32% to 19% and grants U.S. products full exemption from tariffs and non-tariff barriers when entering the Indonesian market. In return, Jakarta has committed to purchasing $15 billion in U.S. energy, $4.5 billion in American agricultural goods, and 50 Boeing aircraft, including several 777s destined for Garuda Indonesia.
Trump described the agreement as “historic,” claiming it will open the entire Indonesian market to American exporters for the first time. However, the announcement sparked concern among local economists, who warned of potential risks to sectors such as poultry and corn farming, which face significantly higher production costs than their U.S. counterparts. President Prabowo sought to reassure the public, emphasizing the importance of safeguarding Indonesian workers.
According to the Office of the U.S. Trade Representative, bilateral trade between the two nations totaled $38.3 billion in 2024, with the U.S. posting a $17.9 billion trade deficit. Indonesia’s main exports to the U.S. include palm oil, metals, textiles, and footwear.
Some observers, such as Shinta Kamdani of the Indonesian Employers Association, cautioned that Trump’s announcement may not reflect the final terms, noting that regional competitors are still in talks with Washington. Others, like economist Harry Su, raised concerns about the geopolitical implications of this new alignment with the U.S., particularly in relation to China, Indonesia’s largest trading partner.
This is the fourth tariff-related deal announced by Trump, following similar agreements with Vietnam, the United Kingdom, and China.

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Source: Nikkei Asia