Trump announces new tariff deal with Indonesia
In a post on Truth Social, Mr Trump said Indonesia had agreed to supply the US with critical minerals, and planned to purchase Boeing aircraft and farming products.
'This Deal is a HUGE WIN for our Automakers, Tech Companies, Workers, Farmers, Ranchers, and Manufacturers,' Mr Trump wrote.
The deal comes as Indonesia was facing a 32 per cent tariff on its exports to the US starting August 1. US officials said the agreement ensures that some tariffs remain on Indonesia, the world's largest Muslim nation with a population of about 280 million people.
'The deal is significant,' one official told journalists on a call. 'It opens new markets for us, exports, reaffirms US digital leadership, and it eliminates non-tariff barriers on US exports.'
The official added that Indonesia would drop its tariffs 'to zero on over 99 per cent of its trade' with the US and would also eliminate all non-tariff barriers.
The deal solidifies Mr Trump's strategy of using the threat of high tariff rates to extract concessions from trade partners under his America First approach. It may serve as a blueprint for agreements with other nations.
He also announced a new 19 per cent tariff rate for goods from the Philippines, after a visit by Philippine President Ferdinand Marcos Jr to the White House.
'It was a beautiful visit, and we concluded our Trade Deal, whereby The Philippines is going OPEN MARKET with the United States, and ZERO Tariffs. The Philippines will pay a 19% Tariff,' Mr Trump said.
He called Mr Marcos a 'very good and tough negotiator.'
Mr Trump in April had announced a blanket 10 per cent tariff on almost all trading partners, while imposing even higher levies on other countries with trade deficits.
Mr Trump, who took office in January, had framed his so-called reciprocal tariff policy as a means to reduce deficits the US has with its trading partners.
The US official said the agreement is worth at least $50 billion to the US in new market access, as well as purchases the Indonesian companies will be making in goods, including liquefied natural gas and farm commodities.
The US had a goods trade deficit of $17.9 billion with Indonesia last year, according to the Office of the US Trade Representative, a 5.4 per cent increase from 2023.
While US exports to Indonesia increased 3.7 per cent to $10.2 billion last year, imports rose 4.8 per cent.
Mr Trump's efforts to reformat US trade has also come with great uncertainty and course reversals.
The US President has said he would swiftly reach trade deals with nations, but so far only Indonesia, the UK and Vietnam have announced agreements. Mr Trump has secured a 'trade truce' with China, which has a separate deadline.
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