Indonesia says it will sign US$34bil pact with US partners ahead of tariff talks deadline
JAKARTA: Indonesia will sign a pact worth US$34 billion with business partners next week to boost purchases from the United States, as part of efforts to strike a trade deal with Washington ahead of the July 9 deadline, Indonesia's chief economic minister said on Thursday (July 3).
The deal would include increasing imports of fuels and investment by Indonesian companies in energy and agriculture sectors in the United States. Separately, flag carrier Garuda Indonesia also said it is in talks to buy up to 75 jets from Boeing.
Jakarta is facing a 32% tariff in US markets and has previously offered to increase US imports to facilitate trade talks between the two sides.
Indonesia enjoyed a goods trade surplus of $17.9 billion with the United States in 2024, according to the U.S. Trade Representative.
Speaking to journalists, Minister Airlangga Hartarto said the memorandum of understanding due to be signed on July 7 will deploy the $34 billion for new Indonesian investments and purchases in the United States.
"This shows that government, regulators, state-owned enterprises and the private sector are together in responding to the imposition of US reciprocal tariffs," Airlangga said.
He said that by addressing the trade balance with the United States, Indonesia hoped to get a better trade deal than the one struck with Vietnam.
The United States announced on Wednesday that it will place a lower-than-promised 20% tariff on many Vietnamese exports, down from the original 46% announced by President Donald Trump in April.
Meanwhile, Garuda's potential jet purchase may include 737 Max 8 and 787 jets, its chief executive Wamildan Tsani told reporters after meeting Airlangga.
It was unclear whether Garuda's discussion with Boeing is part of the tariff negotiations.
The airline is struggling to recover from the impact of the pandemic. It secured a $405 million loan from sovereign wealth fund Danantara Indonesia in June for maintenance, repair and overhaul of its fleet. - Reuters
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