Trump hails landmark Indonesia trade deal as boost for American jobs and exports

Indonesia has committed to removing tariffs on more than 99% of US goods and eliminating all non-tariff barriers facing American companies. On the other hand, the United States will cut its proposed tariffs on Indonesian imports from 32% to 19%. 

This agreement is under the deal described in the release as an “Agreement on Reciprocal Trade.” 

Trump hails landmark trade deal as boost for American jobs and exports

President Donald Trump celebrated the deal as a major victory for American industries. “A huge win for our Automakers, Tech Companies, Workers, Farmers, Ranchers, and Manufacturers,” he posted on Truth Social.

A joint statement and a White House fact sheet detailed the accord’s framework, noting that negotiators will finalize the full agreement in the coming weeks. “The United States of America and the Republic of Indonesia agreed to a framework… which will provide both countries’ exporters unprecedented access to each other’s markets,” the statement read.

During this period, they will also “prepare the agreement for signature and complete domestic procedures required for it to enter into force,” the statement said.

The newly released framework closely reflects the terms Trump outlined last week on social media, when he claimed to have “finalized” a deal with Indonesia following a conversation with its president, Prabowo Subianto.

Deal includes $18B in commercial agreements and major policy shifts 

Tuesday’s formal statement revealed that the framework includes a series of upcoming commercial agreements between the United States and Indonesia, such as a $3.2 billion aircraft purchase and approximately $15 billion in energy product deals.

The agreement also outlines plans to tackle various non-tariff barriers and other challenges American companies face in accessing Indonesia’s markets.

According to the Commerce Department, Indonesia ranks among the top 25 US trading partners, with over $38 billion in goods exchanged in 2024. The US trade deficit with Indonesia stood at $17.9 billion last year.

US Trade Representative Jamieson Greer noted that today’s announcement shows that America can defend its domestic production while obtaining expansive market access with its trading partners.

The agreement is one of the few completed by the Trump administration before the August 1 deadline for planned tariff hikes. The new US tariff rate for Indonesia—Southeast Asia’s largest economy—now matches the 19% rate set for the Philippines, while Vietnam faces a 20% rate.

However, the countries involved have yet to confirm the terms the White House outlined officially officially. Meanwhile, Trump has issued letters to major US trade partners warning of significant tariff hikes set to take effect on August 1.

Indonesia will drop plans to levy tariffs on internet data flows as part of the deal. It supports the renewal of the World Trade Organization’s moratorium on e-commerce duties. The country will also remove pre-shipment inspections and verifications that hindered US agricultural exports, which officials say could help restore a previously held surplus in American farm goods.

In a boost for the US auto industry, Indonesia has agreed to accept US Federal Motor Vehicle Safety Standards for vehicles exported to its market of 280 million people. Additionally, Indonesia will lift export restrictions on industrial commodities, including critical minerals, and eliminate local content requirements for products containing those materials when shipped to the US.

The agreement also commits Indonesia to removing import restrictions and licensing requirements on US remanufactured goods and parts. It has further agreed to join the Global Forum on Steel Excess Capacity and take action to address global oversupply in the steel sector.

The joint statement noted that the US could identify certain commodities not naturally available or produced domestically for further tariff reductions. Both countries also plan to negotiate rules of origin to ensure that the deal’s benefits are limited to US and Indonesian producers, and not extended to third-party nations.

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