President Trump on Tuesday offered more specifics surrounding a trade agreement the United States struck with Indonesia, which White House officials said would lower tariffs on American goods to practically zero even as tariffs remain on Indonesian products.
Trump posted on Truth Social that Indonesia would provide critical minerals to the U.S. as part of the agreement and would purchase Boeing aircraft and American farm products.
“This Deal is a HUGE WIN for our Automakers, Tech Companies, Workers, Farmers, Ranchers, and Manufacturers,” Trump posted on Truth Social.
Indonesia will eliminate all tariffs on “over 99 percent” of its trade with the United States, a senior administration official told reporters. Indonesia will also drop a number of non-tariff barriers, the official said, including exempting U.S. companies from requirements that products be made with a certain percentage of local content.
In response, the U.S. will set a tariff rate of 19 percent on goods from Indonesia. Trump had previously announced that tariff rate, which is the same as the one applied in a trade deal announced Tuesday with the Philippines.
The U.S. exported roughly $10 billion worth of goods to Indonesia in 2024 and imported roughly $28 billion from Indonesia, according to government data.
Goods that are trans-shipped, meaning they pass through an intermediary location on the way to their final destination, will face a 40 percent tariff, the senior administration official said. The Trump administration has zeroed in on trans-shipped goods, arguing it is a way of evading tariffs by passing products through another country that faces a lower tariff rate.
The senior administration official argued the deal is ultimately a positive for both sides. Indonesia will face a higher tariff rate than it faced when Trump took office, but a lower tariff rate than the 32 percent Trump threatened in a letter earlier this month.
“But overall, this is a great deal, because it’s a balanced deal that will lead to more fair and reciprocal trade between the United States and Indonesia,” the official said. “Indonesia has been a great partner in all of this, and it’s a testament to their negotiators that they were able to get to a deal quickly and take bold action.”
The president in April announced a 10 percent tariff on all imports, as well as sweeping “reciprocal” tariffs on dozens of other nations. He lowered those reciprocal rates after backlash from financial markets, but has now said higher tariffs will go into place for some countries beginning Aug. 1.
While Trump administration officials have repeatedly teased a slew of deals ahead of that deadline, the U.S. has so far only struck agreements with the United Kingdom, Indonesia, Vietnam and the Philippines, as well as a framework with China.
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