US, Indonesia sign trade deal; tariff cut to 19%

The United States has entered into a new trade agreement with Indonesia, a country in Southeast Asia. US President Donald Trump stated that the deal lowers tariffs on imports from Indonesia from 32% to 19%.

The BBC reported that US President Donald Trump finalized the agreement through a direct phone call with Indonesian President Prabowo Subianto. The report was published on Wednesday (July 16). However, Indonesia has not yet issued any official statement regarding the deal.

Trump said that US companies will now get full access to the Indonesian market under this agreement. He said, “They (Indonesia) will pay a 19% tariff, and we are giving nothing in return. Our companies are getting full access to their market.”

Earlier, the US had sent a warning letter to Indonesia about imposing up to 32% tariffs. After the White House announced the possibility of high tariffs, trade talks between the US and several countries gained momentum.

Besides Indonesia, the Trump administration has also threatened to impose tariffs on other key trade partners like the European Union, Canada, Mexico, Japan, and South Korea.

Trump also mentioned that as part of the deal, Indonesia will reduce its own tariffs on American agricultural and manufactured goods — an issue Washington had long complained about.

Although the trade relationship between the US and Indonesia is relatively small, the volume of trade between the two countries has been growing rapidly in recent times. Experts see this new deal as a major step forward in strengthening ties between the two nations.