New US Agreement Lowers Tariffs on Indonesian Goods to 19% While EU Braces for Retaliation

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President Donald Trump announced on July 15 that the U.S. has negotiated a new agreement with Indonesia to reduce its planned tariffs on goods from 32% to 19%, according to Reuters.

Speaking outside the Oval Office, Trump said of Indonesia, “They are going to pay 19% and we are going to pay nothing ... we will have full access into Indonesia, and we have a couple of those deals that are going to be announced."

A Truth Social post by Trump announced a purported Indonesian agreement to buy $15 billion in U.S. energy, $4.5 billion in U.S. farm products, plus 50 Boeing jets.

Indonesian President Prabowo Subianto posted on Instagram that the deal marked a "new era of mutual benefit" with Washington and told reporters in Jakarta on July 16 that Trump was "quite a tough negotiator.”

U.S. exports to Indonesia rose 3.7% last year, while imports from the country were up 4.8%, and according to U.S. Census Bureau data from the International Trade Centre's TradeMap tool, in 2024, the top U.S. import categories from Indonesia were palm oil, electronics equipment including data routers and switches, footwear, car tires, natural rubber and frozen shrimp.

The deal with the Southeast Asian country comes two weeks shy of the U.S. The administration plans to raise tariffs on most US imports by August 1st. Trump has threatened a 30% tariff on imports from the 27-nation EU bloc from Aug. 1, which European officials say would end normal trade between two of the world's largest markets.

If talks with Washington fail before the deadline, the European Commission, which oversees trade for the 27-member EU bloc of countries, is prepared to target 72 billion euros ($84.1 billion) worth of U.S. goods - from Boeing aircraft and bourbon whiskey to cars - for possible tariffs.

The package also covers chemicals, medical devices, electrical and precision equipment, as well as agriculture and food products - a range of fruits and vegetables, along with wine, beer, and spirits - valued at 6.35 billion euros.