President Donald Trump on Tuesday announced that the United States has finalized a new trade agreement with Indonesia, signaling what both sides are calling a major breakthrough in bilateral relations and economic cooperation.
The deal reduces U.S. tariffs on Indonesian exports to 19%, down from the 32% rate that had been previously threatened. In return, Indonesia has agreed to eliminate all tariffs on American goods, according to Trump.
Speaking to reporters after revealing the deal on his platform Truth Social, Trump said the agreement includes $15 billion in U.S. energy exports, $4.5 billion in American agricultural products, and 50 Boeing jets, many of them long-haul 777 models.
“Great deal, for everybody, just made with Indonesia. I dealt directly with their highly respected President,” Trump wrote on Truth Social. “DETAILS TO FOLLOW!!!”
A Hard-Fought Negotiation
On Wednesday, the Indonesian government confirmed the deal, crediting the country’s negotiating team for securing favorable terms.
“This is an extraordinary struggle by our negotiating team led by the Coordinating Minister for Economic Affairs,” said Hasan Nasbi, a spokesperson for Indonesian President Prabowo Subianto, in a statement to Reuters.
According to the Indonesian government, the agreement was finalized directly through a phone call between Trump and President Subianto. In an Instagram post, Subianto hailed the deal as a turning point in U.S.-Indonesia relations:
“We agreed and concluded to take trade relations between Indonesia and the United States into a new era of mutual benefit between our two great nations,” he wrote.
Copper, Tariffs, and a Shifting Trade Landscape
Before departing for a summit in Pittsburgh, Trump hinted that Indonesian copper exports could benefit from reduced tariffs under the new agreement.
“Indonesia is known for high-quality copper, which we’ll be using,” Trump said, in reference to the country’s growing role in global copper supply chains.
The statement adds further intrigue to Trump’s looming 50% global copper import tariff, which is slated to take effect on August 1. While Indonesia exported only $20 million worth of copper to the U.S. last year, Trump’s comments suggest Jakarta may receive preferential treatment under the new framework.
U.S. Commerce Secretary Howard Lutnick echoed the shift in tone:
“No tariffs there; they pay tariffs here. Switching the asymmetry our way,” he said in a Tuesday interview with CNBC.
A Broader Strategy in Motion
Trump also revealed that India is pursuing a similar deal. In April, the administration briefly imposed 32% tariffs on Indian goods before introducing a temporary 10% base tariff, which expires August 1.
This agreement with Indonesia marks Trump’s fourth trade deal announcement in just three months, part of a broader campaign promise to overhaul U.S. trade relationships. Earlier this month, he claimed to have secured a deal with Vietnam, though no further details have emerged.
Still, progress has been mixed. While Trump has pledged dozens of new deals, only a handful have reached announcement stage, and most await formal documentation or implementation details.
Business Uncertainty Remains
The unpredictability of Trump’s trade approach has left many businesses on edge, as tariff rates can change rapidly and without much warning.
While Trump insists companies can avoid the uncertainty by relocating production to the U.S., industry experts warn that such moves require major investments, years of planning, and may lead to higher prices for consumers.
Indonesia ranks as America’s 23rd-largest trading partner, according to the U.S. Commerce Department. In 2024, the U.S. imported $28 billion worth of Indonesian goods, led by apparel and footwear, while exporting $10 billion worth of American goods, primarily oil, gas, and agricultural products.
