Trump and Indonesia Strike Landmark Trade Deal: The Big Picture
President Donald Trump announced on July 15, 2025, a preliminary trade agreement with Indonesia—shortly after threatening a steep 32% tariff on Jakarta’s exports .
Under the deal:
- Indonesia will face a 19% tariff on exports to the U.S., down from the previously threatened 32% .
- In return, the U.S. will impose zero tariffs or non‑tariff barriers on imports from Indonesia .
- Indonesia has committed to buying $15 billion in U.S. energy, $4.5 billion in farm goods, and 50 Boeing aircraft .
Trump framed the deal as mutually beneficial: “They are going to pay 19% and we’re going to pay nothing…this gives us access into Indonesia, which we’ve never had” . The agreement notably opens doors for American critical‑mineral and energy exporters, with Indonesian copper and nickel also in the mix .
On the Indonesian side, President Prabowo Subianto hailed the agreement as a “new era of mutual benefit,” calling Trump a “tough negotiator” after intense discussions. Jakarta’s stock market reacted positively, and economists forecast potential GDP gains and smoother monetary policy .
But questions remain: implementation timelines, penalties for goods trans‑shipped via China, and how this pact fits into Trump’s broader tariff strategy—set to hit other countries beginning August 1 . U.S. inflation (2.7% in June) and Federal Reserve rate‑cut dynamics also loom large