Indonesia will see a significant reduction in their U.S.-imposed tariffs from 32 per cent to 19 per cent on Aug. 1, U.S. President Donald Trump announced on Truth Social on Jul 15.
In return, the Southeast Asian country will make a series of significant purchases from the U.S., including 50 Boeing jets.
Deal struck
According to Trump, he concluded the deal with Indonesia's President Prabowo Subianto on the morning of Jul. 15.
"This landmark Deal opens up Indonesia’s ENTIRE MARKET to the United States for the first time in History," Trump said on Truth Social.
Indonesia committed to purchasing US$15 billion (S$19.3 billion) worth of U.S. Energy, US$4.5 billion (S$5.8 billion) in American agricultural products, and 50 Boeing Jets, a number of which are 777s, Trump added.
The Guardian reported that Boeing shares closed down 0.2 per cent after Trump's announcement.
"They are going to pay 19 per cent and we are going to pay nothing … we will have full access into Indonesia, and we have a couple of those deals that are going to be announced," he also told reporters on Jul 15.
As part of the deal, goods that are transshipped from a higher tariff country to Indonesia will need to add Indonesia's 19 per cent tariff on top of their own, Trump also said.
Indonesia had previously been warned of a 32 per cent tariff on Aug. 1 if no trade deal was made, as part of a series of letters Trump sent to Asian countries including Japan, South Korea, Malaysia and Thailand.
The Trump Administration is reportedly under pressure to conclude further deals with more countries who seek to avoid the tariffs.
As of now, Trump has only unveiled trade deals with Britain and Vietnam, as well as an agreement with China to lower tit-for-tat reciprocal tariffs that began in April.
He separately told reporters that deals with other countries, including India and the European Union, are underway, The Guardian reported.
"Thank you to the People of Indonesia for your friendship and commitment to balancing our Trade Deficit," Trump concluded in his post.
