While higher than the 10% baseline tariff that the U.S. has slapped on almost all other countries, the 19% rate is significantly lower than the 32% blanket duty that Indonesia initially faced under President Donald Trump’s “liberation day” tariff plan in April.
00:00The U.S. and Indonesia agreed to the framework of a trade agreement which could see Jakarta scrap most of its tariffs on American imports, the White House revealed in a joint statement Tuesday afternoon.
00:11U.S. tariffs on Indonesian imports would be set at 19% under the deal, which is described in the release as an agreement on reciprocal trade.
00:20The joint statement notes that the U.S. and Indonesia will continue to negotiate and finalize the agreement on reciprocal trade in the coming weeks.
00:32They will also prepare the agreement for signature and undertake domestic formalities in advance of the agreement entering into force in that time.
00:41The newly unveiled terms of the framework mirror the ones Trump laid out when he first announced on social media last week
00:47that he had finalized a deal with Indonesia after speaking to its president Prabowo Subianto.
00:53The framework also includes a series of forthcoming commercial deals between the two countries,
00:59including an aircraft purchase valued at $3.2 billion and an estimated $15 billion in purchases of energy products.
01:07The framework also says the countries will also address various non-tariff barriers and other obstacles that the U.S. faces in Indonesian markets.
01:15Indonesia is one of the United States' top-25 trade partners,
01:20with the two countries trading more than $38 billion in goods in 2024, according to the Commerce Department.
01:28The U.S. trade deficit with Indonesia totaled $17.9 billion last year.
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