Landmark US-Indonesia Trade Deal Forges Stronger Economic Ties

Washington D.C., July 16, 2025 – In a significant move set to reshape global trade dynamics, United States President Donald Trump today announced a new, comprehensive trade agreement with Indonesia. This landmark US-Indonesia trade deal sees a substantial reduction in tariffs on Indonesian imports to the U.S. and secures major economic commitments from Jakarta, promising a new era of balanced and robust bilateral trade.

Under the terms of this pivotal US-Indonesia trade deal, tariffs on Indonesian goods entering the United States will be slashed to 19 percent, a notable decrease from the previously proposed 32 percent. This reduction follows intensive negotiations between President Trump and his Indonesian counterpart, President Prabowo Subianto, underscoring both nations’ commitment to fostering closer economic cooperation.

Key Components of the US-Indonesia Trade Deal

The agreement, as unveiled by President Trump on Truth Social, is designed to create a more equitable trade environment and open new avenues for American businesses. Here are the core facets of the US-Indonesia trade deal:

• Tariff Reduction for Indonesia: Indonesian imports to the U.S. will now face a flat 19 percent tariff, significantly easing the burden on Indonesian exporters and promoting increased trade flow.
• Market Access for U.S. Goods: In a reciprocal arrangement, American exports to Indonesia will reportedly be exempt from both tariff and non-tariff barriers, providing unprecedented access to Indonesia’s market of over 280 million people for U.S. farmers, ranchers, and fishermen.
• Substantial Indonesian Commitments: As part of the US-Indonesia trade deal, Indonesia has pledged to make significant purchases of American products. These include an estimated $15 billion worth of U.S. energy products, $4.5 billion in U.S. agricultural goods, and a commitment to acquire 50 Boeing aircraft, primarily Boeing 777 passenger jets.
• Addressing Transshipment: The agreement also incorporates provisions to prevent tariff circumvention, with President Trump emphasizing that any transshipments from higher-tariff countries would incur additional levies. This measure aims to ensure fair trade practices and uphold the integrity of the US-Indonesia trade deal.

A Victory for Balanced Trade

This historic US-Indonesia trade deal is a testament to President Trump’s broader strategy to reset global trade terms and address trade imbalances. The agreement is poised to substantially reduce the U.S. trade deficit with Indonesia, which stood at nearly $18 billion in goods trade in 2024. While Indonesia may not be among the largest U.S. trading partners, bilateral trade totaled around $40 billion in 2024 and has been steadily growing, making this US-Indonesia trade deal particularly impactful for future economic relations.

The successful negotiation of this US-Indonesia trade deal sends a strong signal to other nations engaged in trade discussions with the United States. It highlights the U.S. administration’s resolve to secure favorable terms that benefit American industries and workers. Discussions are reportedly ongoing with other key partners, including India and the European Union, as the August 1 deadline for elevated import levies approaches.

Indonesian officials have expressed satisfaction with the outcome, acknowledging the intensive efforts involved in reaching this accord. This new framework for the US-Indonesia trade deal is expected to strengthen economic ties and foster mutual growth, proving that strategic negotiations can lead to beneficial outcomes for all parties involved.