On Monday, 7 July 2025, US President Donald Trump announced the imposition of import tariffs on 14 countries, including Indonesia, declaring that Indonesian products would face a tariff rate of 32%. According to Mr Trump, these tariffs were scheduled to come into effect on 1 August 2025.
“The tariff imposed for Indonesia is 32%, which means it is the same as the previous provision on 2 April 2025,” President Trump stated.
Following this development, Indonesia’s President, Prabowo Subianto, dispatched the Coordinating Minister for Economic Affairs, Airlangga Hartarto, to Washington, DC, to negotiate with the US administration in an effort to avert the significant tariff hike.
US and Indonesia Reach Agreement on 19% Tariff and Trade Commitments
On Tuesday, 15 July 2025, President Trump announced a revised agreement, reducing the proposed import tariff on Indonesian goods from 32% to 19%. He stated that this was the outcome of negotiations between the two governments, which also secured concessions favourable to US exports.
“They (Indonesia) will pay 19 per cent and we (the US) will pay nothing,” said Mr Trump, as reported by Reuters on Wednesday, 16 July. “We will have full access to Indonesia, and we have some deals that will be announced.”
The US Secretary of Commerce, Howard Lutnick, provided further details on the agreement, stating: “There are no tariffs there. They pay tariffs here, changing the asymmetry towards us. Let’s revive industry, and that will free up our farmers, ranchers, fishermen, and industry.”
As part of the deal, Indonesia is committed to significant purchases of American goods.
President Trump confirmed that Indonesia would buy US energy products worth US$15 billion, approximately Rp244 trillion, as reported by CNN Business.
In addition, Indonesia is expected to purchase US agricultural products valued at US$4.5 billion, or around Rp73 trillion.
The agreement also includes Indonesia’s commitment to purchase 50 Boeing aircraft, primarily Boeing 777 models, a move that aligns with earlier reports suggesting that Garuda Indonesia has been considering acquiring between 50 and 75 Boeing aircraft.
Mr Trump remarked that “Indonesia is known for having high-quality copper, which we will use,” hinting at future resource cooperation.
On his social media platform, Truth Social, President Trump described the agreement as a major step forward, writing: “A great deal, for everyone, was only made with Indonesia. I am in direct contact with their highly respected President. DETAILS TO COME!!!”
President Prabowo Subianto addressed the development in a statement shared on his personal Instagram account, @prabowo, on Wednesday, 16 July 2025.
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He confirmed that he had spoken by telephone with Mr Trump. “We agreed to bring trade relations between Indonesia and the United States to a new era of mutual benefit for our two great countries,” President Prabowo wrote, although he did not specify further details of the trade arrangement.
Mr Trump likewise affirmed their conversation, saying: “I spoke directly with their very great, very popular, strong, and smart president, and we made a deal.”
President Trump further emphasised the reciprocal aspect of the agreement, noting: “We’re not going to pay any tariffs. So they’re giving us access to the Indonesian market, which we never had before. That’s probably the biggest part of this deal. And the other part is that they will pay 19%.”
