U.S. President Donald Trump speaks with the media upon his arrival from Pennsylvania, as U.S. Secretary of Commerce Howard Lutnick looks on, at Joint Base Andrews, Maryland, U.S., July 15, 2025.
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REUTERS/Nathan Howard
US President Donald Trump said he reached a deal with Indonesia that will see goods from the country face a 19% tariff, while US exports will not be taxed.
“They are paying 19% and we are not paying anything,” Trump told reporters Tuesday at the White House. “We are going to have full access to Indonesia.”
Trump has sent tariff letters over the last week to multiple trading partners, increasing pressure on negotiators ahead of an Aug. 1 deadline for higher duties to take effect. A pact with Indonesia, which was threatened with a 32% tariff, would be the first struck with a country targeted by one of those messages to reduce their rate.
Indonesia to buy Boeing jets, US energy
Indonesia also agreed to purchase $15 billion in US energy, $4.5 billion worth of agricultural products and 50 Boeing Co. jets, “many of them 777’s,” Trump said later on social media.
“If there is any Transshipment from a higher Tariff Country, then that Tariff will be added on to the Tariff that Indonesia is paying,” the president added.
Markets have been in wait-and-see mode on Trump’s trade proclamations, given he has changed rates and deadlines multiple times since he announced country-by-country tariffs on April 2 and then quickly paused them. Boeing shares increased as much as 0.8% on the announcement, while the dollar rose 0.4% on Tuesday. The S&P 500 was little changed after earlier topping 6,300.
Trump finalised deal directly with Prabowo
Trump initially announced the accord on social media, without providing specifics. He said he dealt directly with Indonesian President Prabowo Subianto to finalize the deal.
Indonesia is preparing a joint statement with the US that will detail additional information, including non-tariff measures and commercial agreements, Coordinating Ministry for Economic Affairs Secretary Susiwijono Moegiarso said in a text message late Tuesday in Jakarta.
Indonesia’s top negotiator, Minister Airlangga Hartarto, last week met with US officials, including Trade Representative Jamieson Greer, Commerce Secretary Howard Lutnick and Treasury Secretary Scott Bessent, to hash out an improved agreement.
Indonesia’s initial proposal fell short
Southeast Asia’s largest economy had earlier proposed near-zero tariffs on about 70% of US imports, as well as business deals in critical minerals, energy, agriculture and defense, but that failed to convince Trump to lower the levy on Indonesian goods from the 32% rate he first set back in April.
An agreement with Indonesia would be the fourth trade framework Trump has announced since pausing his country-specific tariffs, after Vietnam and the UK. The US and China also reached a tariff truce that includes the planned resumption of critical minerals and technology trade between the world’s two largest economies.
The pacts have thus far fallen short of full-fledged trade deals, with many details left to be negotiated later. Trump provided no paper to back up last week’s claim of a deal with Vietnam. The country’s leadership was caught off guard by Trump’s declaration that Hanoi agreed to a 20% tariff, and the Vietnamese government is still seeking to lower the rate, according to people familiar with the matter.
Trump has kept foreign governments and investors on edge about his tariff agenda, with partners rushing to avoid higher import taxes and markets facing yet another dose of uncertainty. The US president indicated Monday he preferred to stick with the levies in his letters, saying, “I really don’t want deals. I just want the paper to get sent.”
The president also said he was willing to continue talks with major economies, including the European Union.
Trump over the last week unleashed a barrage of tariff demand letters, informing other economies of new duties set to begin Aug. 1 if they cannot negotiate better terms with the US. The missives extended what was initially a July 9 deadline for another three weeks, setting off another frantic dash of negotiations.
The slew of tariff threats from Trump have prompted economies to broaden trade ties beyond the US; Indonesia reached a tentative economic agreement with the EU over the weekend.
“There is quite a level of frustration with these deals and more talk about exploring those other options, to include Europe,” said Erin Murphy, senior fellow on emerging Asia economics at the Center for Strategic and International Studies.
Southeast Asia balances US–China pressures
Southeast Asian nations — loathe to choose between the US and China — have long been caught in the middle of economic and political battles between the two superpowers. While Vietnam is said to be further along in trade negotiations with the US, Thailand is in ongoing talks and mulling how to reduce US duties without giving away too much and stoking domestic unrest.
Philippine officials also are pushing to secure a pact ahead of the new deadline, with President Ferdinand Marcos Jr. set to visit Washington later this month in an effort to reduce or eliminate Trump’s planned 20% tariff on the island nation.
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Published on July 16, 2025
