US President Donald Trump and Indonesian President Prabowo Subianto have reached a trade agreement that will lower tariffs on Indonesian exports to the United States from 32% to 19%, easing tensions triggered by Trump’s recent wave of tariff threats.
In return, Trump announced that the United States will receive “full access” to Indonesian markets, particularly for American agricultural products, energy, and aerospace technology. Indonesia has committed to purchasing $15 billion worth of US energy, $4.5 billion in agricultural goods, and 50 Boeing jets, according to the White House.
President Prabowo, speaking in Jakarta, called the agreement a “new era of mutual benefit” and described Trump as “a tough negotiator.” While the Indonesian leader did not confirm all the figures publicly, he acknowledged key areas of cooperation, including energy imports and aircraft purchases. “We need planes, and they want to sell,” Prabowo said. “Boeing is quite good, and we’ll also continue to work with Airbus.”
The agreement marks the latest in a series of bilateral trade deals initiated by the Trump administration since a tariff escalation campaign resumed in early July. Dozens of countries—including major trading partners such as the European Union, Canada, Mexico, Japan, and South Korea—have received letters from Washington warning of new tariffs set to take effect on August 1.
Indonesia, which had believed a deal was near finalization, was caught off guard by Trump’s letter last week outlining a 32% tariff on its exports. However, the tensions were defused following a phone call between the two presidents, after which Trump announced the revised 19% tariff rate.
“They are going to pay 19%, and we are going to pay nothing,” Trump told reporters. “We will have full access into Indonesia.”
Indonesia exported roughly $28 billion in goods to the US in 2024, with key exports including clothing, footwear, palm oil, and electronics. Analysts say that while the deal provides some tariff relief and preserves trade ties, it is unlikely to bring major economic gains to Indonesia.
“The benefits of the deal to Indonesia are more political than economic,” said Stephen Marks, an economics professor at Pomona College. “The US is an important export market for Indonesia, but not the dominant one in Asia.”
The US has recently concluded similar deals with the UK, China, and Vietnam. However, those agreements left many core issues unresolved and maintained high tariffs on key sectors.
Trade experts say more deals are expected in the weeks ahead, as countries adjust to the Trump administration’s assertive trade posture. “The tone is changing,” said Everett Eissenstat, a former White House economic adviser. “Governments increasingly see negotiating as preferable to confrontation—even if the outcomes fall short of expectations.”
