2 days ago
CCTV Script 23/07/2025
As the August 1st deadline approaches, the U.S. government is intensifying efforts to reach trade agreements with various countries. On Tuesday local time, progress was made in trade negotiations between the U.S. and Southeast Asian nations.
According to the joint statement released by the White House, U.S. tariffs on Indonesia have been reduced from the previously threatened 32% in April to 19%. In return, Indonesia will lower tariffs to 0% on 99% of U.S. exports to Indonesia, covering sectors such as agricultural products, healthcare products, aquatic products, as well as communications technology, automobiles, and chemicals.
In terms of tariff rates, the Special Adviser to the Indonesian President on International Trade said in an interview with CNBC that while the original 32% tariff level would have significantly impacted Indonesia's economy, the current 19% tariff is expected to shift the effect on GDP from a negative 0.6% to a positive growth of 0.5%.
"We will be able to avoid, hopefully, the potential retrenchment in our labor intensive industries and exports, which have been the worst hit with the 32% tariff."
It is worth noting that, according to the joint statement, Indonesia will comprehensively ease non-tariff barriers on U.S. industrial and agricultural products, including localization requirements, certification standards, import permits, and more.
Specifically, Indonesia has agreed to exempt U.S.-invested companies and their products of origin from local content requirements. Previously, this policy was seen as a key measure to promote local employment in Indonesia, but it has now been relaxed. Secondly, Indonesia has agreed to adopt for American-made cars exported to Indonesia, which is also a positive development for U.S. automakers. Additionally, Indonesia will lift export restrictions on critical minerals.
Moreover, overnight, Trump announced that the U.S. would impose a 19% tariff on the Philippines. This tariff adjustment follows a rise from 17% in April to 20% at the beginning of this month, and has now been reduced to 19%, matching the rate applied to Indonesia.
According to U.S. government data, the U.S. trade deficit with the Philippines last year was $4.9 billion, with bilateral trade totaling $23.5 billion.
In response to Trump's proposal for the Philippines to open its market to the U.S. and implement zero tariffs, the Philippines has yet to respond. Previously, the Philippines stated that it could not implement zero tariffs on U.S. goods like Vietnam and Indonesia, as it would harm the interests of domestic businesses.
The president of the Philippine Exporters Confederation said in a CNBC interview that, based on a survey of local exporters, 10% of respondents reported their buyers were in a wait-and-see mode due to uncertainty about absorbing additional costs. However, most of these orders have already been successfully redirected to other markets.
For Southeast Asian countries, they are closely monitoring the progress of trade negotiations between their neighbors and the U.S. This attention underscores the interconnected nature of regional trade dynamics and the potential ripple effects of bilateral agreements on neighboring economies.
"We're really worried about the negotiations of our competitors. So sort of especially in the region. Because if what happens to Vietnam happens to the other countries here who have the same products with us, then we have a problem in the US, at least."
