President Donald Trump on Tuesday announced a sweeping new trade agreement with Indonesia, marking a historic realignment of U.S. trade terms with the world’s fourth most populous country.
“This morning I finalized an important Deal with the Republic of Indonesia after speaking with their Highly Respected President Prabowo Subianto,” Trump wrote on Truth Social. “This landmark Deal opens up Indonesia’s ENTIRE MARKET to the United States for the first time in History.”
What’s In the Deal
Under the agreement:
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Indonesia will purchase $15 billion in U.S. energy exports,
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$4.5 billion in American agricultural goods, and
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50 Boeing aircraft, primarily the 777 model, made in the U.S.
In return, U.S. exports to Indonesia will face zero tariffs, while Indonesian goods will be taxed at 19% upon entering the American market.
“For the first time ever, our Ranchers, Farmers, and Fishermen will have Complete and Total Access to the Indonesian Market of over 280 million people,” Trump said.
Additionally, any transshipped goods funneled through Indonesia from higher-tariff countries will also face the full applicable tariff rate.
“If there is any Transshipment from a higher Tariff Country, then that Tariff will be added on to the Tariff that Indonesia is paying,” Trump noted. “Thank you to the People of Indonesia for your friendship and commitment to balancing our Trade Deficit.”
Strategic Context
Indonesia, Southeast Asia’s largest economy and a rising global power, is often grouped among the CIVETS countries (Colombia, Indonesia, Vietnam, Egypt, Turkey, South Africa). The OECD ranks Indonesia as the 7th largest economy by purchasing power parity (PPP), with projections placing it as the 4th largest economy in the world by 2050, behind only the U.S., China, and India.
In 2024, U.S.-Indonesia trade totaled more than $38 billion, with the U.S. running a $17.9 billion trade deficit, according to the Commerce Department. Trump previously imposed 32% tariffs on Jakarta’s exports as part of his broader “Liberation Day” tariffs targeting imbalanced trading relationships.
Follows Historic Vietnam Agreement
The Indonesia agreement closely mirrors Trump’s July 2 deal with Vietnam, where Hanoi agreed to:
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20% tariffs on all exports to the U.S.,
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40% tariffs on all transshipped goods,
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And zero tariffs for all U.S. exports entering Vietnam’s market.
Vietnam also pledged to crack down on Chinese transshipping, enforce rules of origin, and step up efforts against intellectual property theft.
“In other words, they will ‘OPEN THEIR MARKET TO THE UNITED STATES,’” Trump said of Vietnam. “We will be able to sell our product into Vietnam at ZERO Tariff.”
