Trump lands Indonesia trade deal as EU readies retaliation
'Great deal, for everybody, just made with Indonesia. I dealt directly with their highly respected President. DETAILS TO FOLLOW!!!' Trump said in a post on Truth Social.
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 Indonesia with a 32 per cent tariff rate effective Aug 1 in a letter sent to its president last week. Trump 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.
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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.
EU readies retaliation
The breakthrough with Indonesia came as the European Commission, the EU's governing body, gets set to target 72 billion euros (S$107.5 billion) worth of US 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
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