Donald Trump announces trade deal with Indonesia with a 19 per cent levy to be imposed

Australia Broadcast Center

15-07-2025

US President Donald Trump says he has struck a trade deal with Indonesia, the latest pact since unveiling his so-called "liberation day" tariff policy.
News of the deal came as the European Union continued to push for its own agreement with the US, while also readying to retaliate if one could not be reached.
"Great deal, for everybody, just made with Indonesia. I dealt directly with their highly respected President. DETAILS TO FOLLOW!!!" Mr Trump said in a post on his social media platform, Truth Social.
He later said the US would pay no tariffs to Indonesia as part of a trade deal while goods from the south-east Asian nation would face a 19 per cent levy.
Indonesia's total trade with the US, which totalled just under $US40 billion ($61.4 billion) in 2024, does not rank in the top 15, but it has been growing.
US exports to Indonesia rose 3.7 per cent last year, while imports from there were up 4.8 per cent, leaving the US with a goods trade deficit of nearly $US18 billion ($27.6)
Last year, the top US import categories from Indonesia, according to US Census Bureau data retrieved on the International Trade Centre's TradeMap tool, were palm oil, electronics equipment including data routers and switches, footwear, car tires, natural rubber and frozen shrimp.
Prior to Mr Trump's comments, Susiwijono Moegiarso, a senior official with Indonesia's Coordinating Ministry for Economic Affairs, told Reuters in a text message: "We are preparing a joint statement between US and Indonesia that will explain the size of reciprocal tariff for Indonesia including the tariff deal, non-tariff and commercial arrangements. We will inform [the public] soon."
Mr Trump had threatened the South-East Asian country with a 32 per cent tariff rate effective August 1 in a letter sent to its president last week.
The US president sent similar letters to roughly two dozen trading partners this month, including Canada, Japan and Brazil, setting blanket tariff rates ranging from 20 per cent up to 50 per cent, as well as a 50 per cent tariff on copper.
The August 1 deadline gives the targeted countries time to negotiate agreements that could lower the threatened tariffs.
Some investors and economists have also noted Mr Trump's pattern of backing off his tariff threats.
So far, framework agreements have been reached with the United Kingdom and Vietnam, and an interim deal has been struck with China to forestall the steepest of Trump's tariffs while negotiations continue between Washington and Beijing.
The breakthrough with Indonesia came as the European Commission, the EU's governing body, gets set to target 72 billion euros ($84.1 billion) worth of US goods, from Boeing aircraft and bourbon whiskey to cars, for possible tariffs if trade talks with Washington fail.
Mr Trump is threatening a 30 per cent tariff on imports from the EU from August 1, a level European officials say is unacceptable and would end normal trade between two of the world's largest markets.
The list, sent to EU member states and seen by Reuters on Tuesday, pre-dates Mr Trump's move over the weekend to ramp up pressure on the 27-nation bloc and responds instead to US duties on cars and car parts and a 10 per cent baseline tariff.
The package also covers chemicals, medical devices, electrical and precision equipment as well as agriculture and food products including a range of fruits and vegetables, wine, beer and spirits, valued at 6.35 billion euros ($11.3b).
Following a meeting of EU ministers in Brussels on Monday, officials said they were still seeking a deal to avoid Mr Trump's heavy tariff blow.
But EU trade chief Maroš Šefčovič said those at the meeting expressed unprecedented resolve to protect EU businesses using European countermeasures if negotiations with Washington failed to produce a deal.
NATO secretary-general Mark Rutte warned on Wednesday that countries such as Brazil, China and India could be hit very hard by secondary sanctions if they continued to do business with Russia.
Mr Rutte made the comment while meeting with senators in the US Congress the day after President Donald Trump announced new weapons for Ukraine and threatened "biting" secondary tariffs of 100 per cent on the buyers of Russian exports unless there was a peace deal in 50 days.
"My encouragement to these three countries, particularly is, if you live now in Beijing, or in Delhi, or you are the president of Brazil, you might want to take a look into this, because this might hit you very hard," Mr Rutte told reporters.
"So please make the phone call to Vladimir Putin and tell him that he has to get serious about peace talks, because otherwise this will slam back on Brazil, on India and on China in a massive way," he added.
Republican US senator Thom Tillis praised Trump for announcing the steps, but said the 50-day delay "worries" him.
He said he was concerned that: "Putin would try to use the 50 days to win the war, or to be better positioned to negotiate a peace agreement after having murdered and potentially collected more ground as a basis for negotiation.
"So we should look at the current state of Ukraine today and say, no matter what you do over the next 50 days, any of your gains are off the table," he added.
Mr Rutte said Europe would find the money to ensure Ukraine was in the best possible position in peace talks.
Reuters/ABC