Trump Announces New Asymmetric Trade Deal with Indonesia, Imposing 19% Tariff

WASHINGTON D.C. / JAKARTA – July 16, 2025 – President Donald Trump has announced a significant new trade agreement with Indonesia, dramatically altering the landscape of bilateral commerce. The deal, revealed on Tuesday, slashes the proposed tariff on Indonesian goods entering the United States to 19 percent, while granting American exports unprecedented "Tariff and Non Tariff Barrier FREE" access to the Indonesian market.

The agreement comes after direct negotiations between President Trump and Indonesian President Prabowo Subianto, signaling a strategic shift in trade relations between the two nations. It represents a key component of Trump's broader initiative to redefine global trade terms ahead of an August 1 deadline for new, elevated import levies.

Under the terms of the new pact, Indonesian products, which had faced a threatened 32 percent tariff, will now be subject to a 19 percent duty upon entering the U.S. In a reciprocal move that U.S. officials have termed an "asymmetric reset," American goods, including agricultural products, will enjoy full market access to Indonesia without any import tariffs.

Crucially, Indonesia has committed to substantial purchases of American products as part of the deal. These commitments include:

• $15 billion worth of US energy products.
• $4.5 billion in US agricultural goods.
• 50 Boeing aircraft, primarily Boeing 777 passenger jets.

The agreement also incorporates a "trans-shipment clause," stipulating that Indonesia will apply the 19 percent tariff to any goods trans-shipped from countries with higher existing tariffs, a measure designed to prevent circumvention of the new duties.

U.S. Commerce Secretary Howard Lutnick underscored the strategic intent behind the deal, stating that it "eliminates tariffs on US exports while imposing tariffs on imports," a move aimed at bringing industry back to America and unleashing American farmers, ranchers, and fishermen.

The United States has historically run a goods trade deficit with Indonesia, which stood at nearly $18 billion in 2024. This new deal is positioned by the Trump administration as a vital step towards rebalancing this trade relationship and supporting domestic industries.

Indonesian President Prabowo Subianto has welcomed the agreement, characterizing it as ushering in a "new era of mutual benefit" between the two countries. His administration acknowledged the "extraordinary struggle" of their negotiating team in securing the reduced tariff rate from the initially threatened 32 percent. However, some Indonesian economists have voiced concerns, suggesting the deal might be "one-sided" and could potentially impact Indonesia's trade balance negatively due to the zero-tariff policy on U.S. imports.

As the August 1 deadline for new tariffs approaches, this agreement with Indonesia serves as a precedent for how the Trump administration intends to reshape its global trade partnerships, prioritizing direct negotiations and reciprocal, albeit asymmetric, market access.