On 15/7, former US President Donald Trump announced a "great deal" with Indonesia on Truth Social. He stated this was the result of "direct work with Indonesian President Prabowo Subianto".
Hours later, Trump provided more details. The tariff applied to Indonesian exports to the US would be 19%. In return, US goods entering Indonesia would be exempt from tariffs and other non-tariff barriers. Transshipped goods would be subject to a higher rate, added to the current 19%.
The new tariff is significantly lower than the 32% the US announced for Indonesia on 2/4 and in a tariff notification the previous week. Indonesia was among the first countries to receive the US tariff notification.
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Former US President Donald Trump at the White House on 13/7. Photo: AP |
Former US President Donald Trump at the White House on 13/7. Photo: AP
Trump expressed enthusiasm for American farmers and fishermen gaining full access to a market of over 280 million people. He said the agreement would, "for the first time in history," open the entire Indonesian market to the US.
"Indonesia has committed to buying 15 billion USD in US energy, 4.5 billion USD in agricultural products, and 50 Boeing aircraft, mostly 777s," he wrote on Truth Social. The CEO of Indonesian state-owned airline Garuda earlier this month confirmed that the airline was negotiating to purchase 50-75 additional Boeing aircraft.
On 4/7, Indonesian Coordinating Minister for Economic Affairs Airlangga Hartarto, also the head of Indonesia's negotiating team with the US, revealed that Indonesia had proposed reducing tariffs on key US exports to nearly 0%. In exchange, Jakarta wanted Washington to reduce preferential tariffs on their main exports, such as electronics, textiles, and footwear. Indonesia also invited the US to invest in mining projects where Indonesia has large reserves, such as copper, nickel, and bauxite.
Indonesia is one of the US's top 25 trading partners. According to the US Department of Commerce, the two countries' import-export turnover reached over 38 billion USD last year. Indonesia's trade surplus with the US was 17.9 billion USD.
Ha Thu (CNBC, Reuters)
