In addition to announcing a 19% duty on Indonesian imports, US President Donald Trump announced a trade pact with Indonesia on Tuesday.
Trump made the statement on his Truth Social platform after weeks of negotiations to avoid a higher duty of 32% that he had previously promised. As per the negotiated agreement, Indonesia will purchase 50 Boeing aircraft, many of which are wide-body 777 jets, $15 billion worth of US energy, and $4.5 billion worth of agricultural products.
Mr. Trump wrote that the move was a “great deal, for everybody,” adding that Indonesia had committed to buying under the terms of the agreement and avoided higher taxes.
The accord seems to be a step forward in Trump’s reinvigorated attempt to reform trade relations as part of his “reciprocal tariff” approach, even though the move got minimal response from markets, Boeing shares remained mostly steady after the news. It is yet unknown when the lower 19% tariff will be implemented, and it is not yet clear how long the purchases will be made.
The agreement follows reports that Trump had direct talks with Prabowo Subianto, the president of Indonesia. Additionally, Trump stated that “steeper levies” will be applied to transshipped commodities, which are goods that are routed through third nations in order to avoid higher US duties.
After threatening to impose broad tariff increases on dozens of nations in April, Mr. Trump announced ambitions for “90 deals in 90 days,” and this arrangement is the most recent in a small number of trade agreements he has introduced. Only a small number of these agreements, such as those with Vietnam, the United Kingdom, and a brief relaxation of trade tensions with China, have been made public thus far.
The US president stated separately on Tuesday that a trade agreement with Vietnam was “pretty well set,” but he gave no new information. The criteria for such classifications have not been made public, but a 40 percent levy on items considered to be unlawfully transshipped was part of a previous tentative agreement with Hanoi.
“We have a Vietnam deal, and I would say that that deal is being pretty well set,” Trump said, downplaying the significance of disclosing all the terms of the Vietnam pact to reporters at Joint Base Andrews in Maryland.
Mr. Trump also declared that smaller nations would shortly receive information about their own revised tariff rates, which are probably going to be “a little over 10pc.” The European Union, South Korea, Japan, Malaysia, and other trading partners have already received more than 20 of these letters. Notifications have also been sent to Canada and Mexico, two countries that were initially left out of Trump’s tariff campaign.
The announcement about Indonesia comes after two higher tariffs that were originally scheduled to go into effect on July 9 were postponed.
Until continuing discussions, the deadline was first postponed and then moved to August 1.
At a Foreign Policy event, former Indonesian vice foreign minister Dino Patti Djalal responded to the accord by saying that the Jakarta government officials were happy with how the talks turned out.
But trade analysts are still wary. Even though the announced agreements seem to be a step forward in Trump’s larger plan to rebalance international trade, several of them, such as those with the EU and Vietnam, are still vague.
