Both U.S. President Trump and Indonesian President Prabowo Subianto announced an adjustment in the tariff rate on Indonesian goods from 32% to 19%. This shift follows a dialogue between the two leaders, with Trump stating the reduction comes in exchange for "full access" for American enterprises.
Prabowo commented on Instagram, describing the agreement as a "new era of mutual benefit," and noted Trump's assertive negotiation style during conversations in Jakarta. This accord follows the U.S. administration's imposition of tariffs earlier this year, prompting discussions with key trading partners.
Indonesia was among the recipients of communication from Trump regarding the impending tariff hike, initially set at 32%. This prompted negotiations that resulted in the current agreement. The U.S. has complained historically about high tariffs on its agricultural and manufactured exports to Indonesia, which the recent talks aim to address.
Under the agreement, the U.S. will gain unrestricted access to the Indonesian market, and Indonesia will procure $15bn in U.S. energy, $4.5bn in agricultural goods, and 50 Boeing jets. Prabowo mentioned the necessity for planes and additional imported resources like fuel and agricultural commodities, acknowledging ongoing discussions with Airbus alongside Boeing. The specific terms regarding tariff-free entry for U.S. goods remain unclarified by Prabowo.
Stephen Marks from Pomona College termed the deal's implications for Indonesia as "more political than economic," noting Indonesia's status as one of the U.S.'s substantial trade partners, primarily exporting electronics, apparel, and palm oil.
Source BBC
