Trump announces Indonesia 'deal' after tariff threats
"Great deal, for everybody, just made with Indonesia," Trump wrote on his Truth Social platform, saying he dealt with the country's president directly. "DETAILS TO FOLLOW!!!"
The Trump administration has been under pressure to finalise trade pacts with other economies after promising a flurry of deals as countries sought to avoid the president's tariff threats.
But Washington has so far only unveiled deals with Britain and Vietnam, alongside an agreement to temporarily lower tit-for-tat levies with China.
Last week, Trump renewed his threat of a 32 per cent levy on Indonesian goods, saying in a letter to the country's leadership that this level would take effect Aug 1.
Trump in April imposed a 10 per cent tariff on almost all US trading partners, while announcing plans to hike this level for dozens of economies including the European Union and Indonesia.
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Business Times
19 minutes ago
- Business Times
Trump sets 19% tariff on Indonesia goods in latest deal, EU readies retaliation
[WASHINGTON] US President Donald Trump on Tuesday (Jul 15) said the US would impose a 19 per cent tariff on goods from Indonesia under a new agreement with the South-east Asian country and said more deals were in the works as he continued to press for what he views as better terms with trading partners and a path to reducing a massive US trade deficit. The pact with the relatively minor US trading partner is among the handful struck so far by the Trump administration ahead of an Aug 1 deadline for tariffs on most US imports to rise again, and it came as the top US trading partner - the European Union - readied retaliatory measures should talks between Washington and its top trading partner fail. As that deadline approaches, talks were underway with other trading partners eager to avoid yet more levies being imposed on their exports to the US beyond a baseline 10 per cent on most goods that has been in place since April. It is a policy regime - rolled out often chaotically by Trump - that has upended decades of trends toward lower trade barriers, often roiling global financial markets and economic activity along the way. Based on Trump tariff announcements through July 13, Yale Budget Lab estimates the US effective average tariff rates will rise to 20.6 per cent from between 2 per cent and 3 per cent before Trump's return to the White House in January. Consumption shifts would bring the rate down to 19.7 per cent, but it's still the highest since 1933. A NEWSLETTER FOR YOU Friday, 8.30 am Asean Business Business insights centering on South-east Asia's fast-growing economies. Sign Up Sign Up Trump outlined an Indonesia deal that had rough contours resembling a pact struck recently with Vietnam, with a flat tariff on exports to the US roughly double the current 10 per cent and no levies placed on US exports going there. It also included a penalty rate for so-called transhipments of goods from China via Indonesia, and a commitment to buy some U.S. goods. 'They are going to pay 19 per cent and we are going to pay nothing ... we will have full access into Indonesia, and we have a couple of those deals that are going to be announced,' Trump said outside the Oval Office. In addition, Trump said later on his Truth Social platform that Indonesia had agreed to buy US$15 billion of US energy products, US$4.5 billion of American farm products and 50 Boeing jets, though no time frame for the purchases was specified. Trump: India talks moving same way Indonesia's total trade with the US - totalling just under US$40 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 US$18 billion. The top US import categories from Indonesia, according to US Census Bureau data retrieved on the International Trade Centre's TradeMap tool, last year were palm oil, electronics equipment including data routers and switches, footwear, car tires, natural rubber and frozen shrimp. 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.' Trump had threatened the country with a 32 per cent tariff rate effective from Aug 1 in a letter sent to its president last week. He 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 Aug 1 deadline gives the targeted countries time to negotiate agreements that could lower the threatened tariffs. Some investors and economists have also noted Trump's pattern of backing off his tariff threats. Since launching his tariff policy, Trump has clinched only a few deals despite his team touting an effort to bring home '90 deals in 90 days.' 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. Trump said talks with India were moving in a similar direction. 'India basically is working along that same line. We're going to have access to India. And you have to understand, we had no access into any of these countries. Our people couldn't go in. And now we're getting access because of what we're doing with the tariffs,' he said. EU readies retaliation The breakthrough with Indonesia came as the European Commission, which oversees trade for the EU, gets set to target 72 billion euros (S$108.1 billion) worth of U.S. goods - from Boeing aircraft and bourbon whiskey to cars - for possible tariffs if trade talks with Washington fail. Trump is threatening a 30 per cent tariff on imports from the EU from Aug 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 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 - a range of fruits and vegetables, along with wine, beer and spirits - valued at 6.35 billion euros. Following a meeting of EU ministers in Brussels on Monday, officials said they were still seeking a deal to avoid Trump's heavy tariff blow. But EU trade chief Maros Sefcovic said those at the meeting expressed unprecedented resolve to protect EU businesses using European countermeasures if negotiations with Washington fail to produce a deal. REUTERS
Straits Times
27 minutes ago
- Straits Times
Trump says Indonesia to face 19% tariff under trade deal
Find out what's new on ST website and app. US President Donald Trump said that Indonesian goods entering the United States would face a 19 per cent tariff. Washington - US President Donald Trump said July 15 that he had struck a trade pact with Indonesia resulting in significant purchase commitments from the South-east Asian country, following negotiations to avoid steeper tariffs. Indonesian goods entering the United States would face a 19 per cent tariff, Mr Trump said in a post on his Truth Social platform. This is significantly below the 32 per cent level the president earlier threatened. 'As part of the Agreement, Indonesia has committed to purchasing US$15 billion (S$19.28 billion) in US Energy, US$4.5 billion in American Agricultural Products, and 50 Boeing Jets, many of them 777's,' he wrote. Boeing shares closed down 0.2 per cent after the announcement. The Trump administration has been under pressure to wrap up trade pacts after promising a flurry of deals recently, as countries sought talks with Washington to avoid the US president's tariff plans. But Mr Trump has so far only unveiled other deals with Britain and Vietnam, alongside an agreement to temporarily lower tit-for-tat levies with China. Last week, he renewed his threat of a 32 per cent levy on Indonesian goods, saying in a letter to the country's leadership that this would take effect Aug 1. It remains unclear when the lower tariff level announced July 15 will take effect for Indonesia. The period over which its various purchases will take place was also not specified. Mr Trump said on social media that under the deal, which was finalised after he spoke with Indonesian President Prabowo Subianto, goods that have been transshipped to avoid higher duties would face steeper levies. He separately told reporters that other deals were in the works, including with India, while talks with the European Union are continuing. Indonesia's former vice-minister for foreign affairs Dino Patti Djalal told a Foreign Policy event on July 15 that government insiders had indicated they were happy with the new deal. Tariffs drive Mr Trump in April imposed a 10 per cent tariff on almost all trading partners, while announcing plans to eventually hike this level for dozens of economies, including the EU and Indonesia. But days before the steeper duties, customized to each economy, were due to take effect, he pushed the deadline back from July 9 to Aug 1. This marked his second postponement of the elevated levies. Instead, since early last week, Mr Trump has been sending letters to partners, setting out the tariff levels they would face come August. So far, he has sent more than 20 such letters including to the EU, Japan, South Korea and Malaysia. Canada and Mexico, both countries that were not originally targeted in Mr Trump's 'reciprocal' tariff push in April, also received similar documents outlining updated tariffs for their products. But existing exemptions covering goods entering the United States under a North American trade pact are expected to remain in place, a US official earlier said. Mr Trump has unveiled blanket tariffs on trading partners in part to address what his administration deems as unfair practices that hurt US businesses. Analysts have warned that without trade agreements, Americans could conclude that Mr Trump's strategy to reshape US trading ties with the world has not worked. 'In the public's mind, the tariffs are the pain, and the agreements will be the gain. If there are no agreements, people will conclude his strategy was flawed,' Mr William Reinsch, senior adviser at the Centre for Strategic and International Studies, previously said. AFP
Business Times
an hour ago
- Business Times
Trump unveils US$92 billion worth of investments to power AI boom
[PITTSBURGH] US President Donald Trump went to Pennsylvania on Tuesday to announce US$92 billion in energy and infrastructure deals intended to meet big tech's soaring demand for electricity to fuel the AI boom. Trump made the announcement at the inaugural Pennsylvania Energy and Innovation Summit at Carnegie Mellon University, with much of the talk about beating China in the global AI race. 'Today's commitments are ensuring that the future is going to be designed, built and made right here in Pennsylvania and right here in Pittsburgh, and I have to say, right here in the United States of America,' Trump said at the event. The tech world has fully embraced generative AI as the next wave of technology, but fears are growing that its massive electricity needs cannot be met by current infrastructure, particularly in the United States. Generative AI requires enormous computing power, mainly to run the energy-hungry processors from Nvidia, the California-based company that has become the world's most valuable company by market capitalisation. Officials expect that by 2028, tech companies will need as much as five gigawatts of power for AI - enough electricity to power roughly five million homes. BT in your inbox Start and end each day with the latest news stories and analyses delivered straight to your inbox. Sign Up Sign Up Top executives from Palantir, Anthropic, Exxon and Chevron attended the event. The funding will cover new data centres, power generation, grid infrastructure, AI training, and apprenticeship programs. Race to beat China Among investments, Google committed US$25 billion to build AI-ready data centres in Pennsylvania and surrounding regions. 'We support President Trump's clear and urgent direction that our nation invest in AI... so that America can continue to lead in AI,' said Ruth Porat, Google's president and chief investment officer. The search engine giant also announced a partnership with Brookfield Asset Management to modernise two hydropower facilities in Pennsylvania, representing 670 MW of capacity on the regional grid. Investment group Blackstone pledged more than US$25 billion to fund new data centers and energy infrastructure. US Senator David McCormick, from Pennsylvania, said the investments 'are of enormous consequence to Pennsylvania, but they are also crucial to the future of the nation.' His comments reflect the growing sentiment in Washington that the United States must not lose ground to China in the race to develop AI. 'We are way ahead of China and the plants are starting up, the construction is starting up,' Trump said. The US president launched the 'Stargate' project in January, aimed at investing up to US$500 billion in US AI infrastructure - primarily in response to growing competition with China. Japanese tech investor SoftBank, ChatGPT-maker OpenAI, and Oracle are investing US$100 billion in the initial phase. Trump has also reversed many policies adopted by the previous Biden administration that imposed checks on developing powerful AI algorithms and limits on exports of advanced technology to certain allied countries. He is expected to outline his own blueprint for AI advancement later this month. AFP
