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Business Times
2 hours ago
- Business
- 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
2 hours ago
- Business
- 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
21 hours ago
- Business
- Business Times
Singapore runners, rejoice: On opens store at Jewel as Asia revenues soar
[SINGAPORE] Any runner in Singapore will tell you this: Scoring a pair of On shoes in recent months has been a minor sport in itself. The Swiss sportswear brand, known for its cloud-like soles and slick minimalist designs, has become a breakout hit across running clubs and TikTok feeds. Social media traction has exploded, thanks to performance-forward models such as the Cloudmonster and fashion-friendly lines like the Cloudnova. Yet, walk into a shoe store such as RL2 by Running Lab or JD Sports – and you are likely to hear the sales assistant say: 'Sold out already.' Well, runners need not fret any more. On's flagship store in Singapore's Jewel Changi Airport is a gateway into the South-east Asian market. PHOTO: ON On has opened its first South-east Asia flagship store at Jewel Changi Airport – a two-storey, 9,300 square foot store that offers the full suite of On gear: from high-performance footwear and warm-weather training apparel to its lifestyle silhouettes and even a kids' collection. For the 15-year-old brand, the Singapore flagship is 'a strategic response to rising demand' and a way to deepen the brand's long-term presence in the region, said On CEO Martin Hoffman. It was created in partnership with Gill Capital, the Singapore-based regional operator for several international brands such as COS, H&M and Hershey's. The launch comes at a time of record-breaking growth for the Zurich-headquartered On. In 2024, On's revenue in Asia-Pacific grew 84 per cent to 260 million Swiss francs. In Q1 2025, it surged another 130 per cent year-on-year to 120.6 million Swiss francs (S$193.8 million), making Apac the company's highest-growth region by year-on-year performance. A NEWSLETTER FOR YOU Friday, 2 pm Lifestyle Our picks of the latest dining, travel and leisure options to treat yourself. Sign Up Sign Up On CEO Martin Hoffman says Asia-Pacific is a primary focus, thanks to a stunning sales surge. PHOTO: ON Globally, On generated 2.32 billion Swiss francs in revenue in 2024, up 29 per cent from the previous year. Net profit more than tripled to 242 million Swiss francs. Hoffmann expects that a 'significant portion of our future growth will be driven by markets outside our more established regions', adding: 'Asia-Pacific is a primary focus – and we're just at the beginning of our journey here.' Inspired by Singapore's coastal running routes, the Singapore store's facade and interior mimic the movement of light bouncing off the sea and skyline, as seen through the eyes of a runner. Curved walls, kinetic lighting and greenery-inspired textures evoke motion and airiness. The flagship is split into two levels: Level one features hero products such as the Cloudmonster and Cloudrunner, as well as the Zendaya x On Zone Dreamers training collection. Level two houses casual models such as the Cloudtilt, performance tennis gear co-designed with Roger Federer, and a compact kids collection which signals On's family-friendly direction. The On store design is inspired by Singapore's coastal running routes. PHOTO: ON Beyond Singapore, On already operates a test store in Jakarta and is preparing to launch in Bangkok. Markets including Malaysia and the Philippines are under active consideration. 'Our strategy isn't about planting flags on a map,' Hoffmann told The Business Times. 'We grow thoughtfully, with the right partners and the right community. Whether it's direct to consumer or strategic local partnerships, it's about offering premium experiences with precision.' Currently, On has a presence in 80 countries. Hoffman added that while demand is high, supply will remain intentionally limited. 'We never discount. We don't chase volume. Even if we see that there is a strong momentum, we will always work through a protected supply. And we will not flood the market.' The store will also host the On Run Clun Singapore for running enthusiasts. PHOTO: ON The Jewel store will also serve as home base for the On Run Club Singapore, hosting weekly group runs, form clinics, injury prevention workshops and athlete meet-ups. 'Movement is a universal language,' said Hoffmann. 'And Singapore – with its vibrant fitness culture – is the perfect place to speak it.' One catch: On's sustainability programme Cyclon – a recyclable, subscription-based running shoe – is not yet available here due to logistical limitations of serving a small market like Singapore. Such a programme requires 'scale and infrastructure', Hoffmann noted. For now at least, the Singapore runners who have been chasing restocks for months can finally slip into the Clouds.
Straits Times
a day ago
- Business
- Straits Times
Thailand's changing cannabis rules leave farmers in a tough spot
Thailand's cannabis industry has been thrown into chaos after the Thai government announced an abrupt legislative backtrack in June. BANGKOK – When Thailand became the first South-east Asian nation to decriminalise cannabis, in 2022, it ignited a 'green rush', swiftly reshaping the economic landscape and challenging long-held cultural norms. Dispensaries proliferated in urban centres such as Bangkok, ballooning to more than 10,000 across the country. But the agricultural communities in the lush northern countryside are perhaps benefiting the most from the burgeoning industry–assuming the government doesn't shut the whole thing down. In the mountains of northern Thailand, which are blessed with an ideal climate and fertile soil, generations of Hmong and other ethnic minorities have long tended the land, preserving an intimate knowledge of indigenous plants and sustainable cultivation practices. Historically these communities were linked to illicit opium cultivation, before they shifted to more wholesome crops including corn, tea and vegetables starting in the late 1960s. Legal cannabis, a more than US$1 billion (S$1.28 billion) a year industry in Thailand, offered them a lucrative pivot these past few years. Now the industry has been thrown into chaos after the Thai government announced an abrupt legislative backtrack in late June. The country moved to restrict cannabis use to medicinal purposes by requiring prescriptions and to cap volumes at a 30-day supply per customer. Keen to crack down on a surge in cannabis tourism, smuggling and underage recreational smoking, Thailand is also expected to draft rules requiring that each dispensary has a doctor on-site; it might even move to reclassify the herb as a Category 5 narcotic. With stricter controls on sales and distribution ahead, the mountainous communities and the operations' backers are bracing for real pain, from lower demand to widespread unemployment. Some Hmong farmers worry they'll have to revert to less profitable and dirtier crops, such as corn, where farmers traditionally burn the fields after harvest, contributing to northern Thailand's worsening air pollution. Still, Ms Chokwan Kitty Chopaka, president of Writing Thailand's Cannabis Future, an advocacy group, is hopeful the agricultural communities won't give up the practice altogether. 'The Hmong people have always been the keepers of seeds,' she says. 'Hopefully they will continue to keep it safe.' Bloomberg
The Star
a day ago
- Business
- The Star
Singapore boosts support for Timor-Leste as it prepares to join Asean
SINGAPORE (The Straits Times/ANN): Singapore will step up its support of Timor-Leste's development of its government's capacity, as the region's youngest nation prepares to join Asean as a full member. The upgraded Singapore-Timor-Leste Asean Readiness Support (Stars) package, known as the enhanced Stars (eStars) package, will offer tailored assistance to help the South-east Asian nation meet requirements to join key Asean economic agreements. This was announced by Prime Minister Lawrence Wong on July 14 at a luncheon for visiting Timor-Leste President Xanana Gusmao. Mr Gusmao is on an official four-day visit to Singapore, more than a decade after his first as prime minister in 2013. He received a ceremonial welcome on July 14 before meeting President Tharman Shanmugaratnam and Prime Minister Lawrence Wong. Speaking at the lunch held at the Pan Pacific Hotel, Mr Wong said the refreshed package will also include training aligned with Timor-Leste's national development priorities, as well as leadership development programmes and scholarships for its future leaders. The eStars package, which runs from July 2025 to December 2028, will offer wider access to Asean-related training courses and expertise to support Timor-Leste's integration into the regional grouping. The first iteration of the Stars initiative formally began in 2022. Addressing Mr Gusmao, PM Wong said: 'Timor-Leste's upcoming accession to Asean is a significant milestone, both for your country and for Asean. Prime Minister of the Democratic Republic of Timor-Leste Xanana Gusmao (right) was hosted to an official lunch by Prime Minister Lawrence Wong at Pan Pacific Singapore on July 13. -- ST PHOTO: SHINTARO TAY 'Singapore looks forward to welcoming you warmly to the Asean family. And we will continue to stand with you on this journey.' Speaking at the same event, Mr Gusmao thanked Singapore for its support over the years, particularly in helping Timor-Leste prepare for Asean membership. He cited the training provided to Timorese civil servants in areas such as negotiation and policy writing, describing it as 'a real difference' that reflects cooperation 'measured not in words, but in actions'. Timor-Leste, with a population of 1.3 million, formally applied to join the regional grouping in 2011. It received in-principle endorsement in May, and its accession is expected to be formalised at the 47th Asean Summit in October. In his speech, PM Wong noted how Mr Gusmao has long-standing ties with Singapore, and that it is proud to be a partner of Timor-Leste. 'We remember well your many contributions to Timor-Leste's journey – fighting for independence, unifying the country, and guiding your people through the early years of nation-building,' Mr Wong said. He added that Singapore has 'stood in solidarity' with Timor Leste even before its independence. Mr Wong noted that the Republic was among the first countries to participate in a multinational peacekeeping mission led by Australia in 1999. Timor-Leste gained independence in 2002, following a 1999 United Nations-sponsored referendum in which an overwhelming majority voted to break away from Indonesian rule. The vote was marred by violence from pro-integration militias, following decades of unrest and foreign occupation. Over the decade since Timor-Leste gained independence, more than a thousand Singapore personnel have worked alongside the Timorese people to provide humanitarian assistance, build institutions, and support its 'transition to peace and stability', PM Wong said. Bilateral ties between Singapore and Timor-Leste have grown steadily, with Singapore starting its embassy in the capital Dili in 2024 – 'a reflection of its commitment to deeper engagement', Mr Wong said. Economic links between both sides are expanding, and Singapore companies are exploring opportunities in hospitality, real estate and other sectors, said PM Wong. He also noted that direct flights between the two countries have resumed, with a mutual visa waiver agreement implemented in 2024. Even prior to the Stars initiative started in 2022, more than 1,100 Timorese officials since 2002 have participated in courses under the Singapore Cooperation Programme, which is Singapore's flagship platform established in 1992 for technical assistance and capacity building for developing nations. These courses help to build capabilities across a range of areas, from public administration to language and communications. A Ministry of Foreign Affairs statement said President Tharman and PM Wong reaffirmed their commitment to supporting Timor-Leste's development through capacity building programmes, welcoming more Timorese officials to participate in the Singapore Cooperation Programme. As his country moves towards full Asean membership, Mr Gusmao acknowledged the challenges ahead but emphasised that regional unity and solidarity are more important than ever in an increasingly unstable world. He noted how Singapore's development discipline and clarity of purpose was an example to nations, not only across the region but around the world. Singapore and Timor-Leste are countries of different cultures and histories, but both share a common spirit that their futures must be shaped by their people, said Mr Gusmao. He also spoke about how both nations are diverse and multicultural, and said it was inspiring to see how Chinese, Malay, Indian and Eurasian communities coexist harmoniously in Singapore. Similarly, he shared how Timor-Leste draws strength from its indigenous roots, Portuguese legacy, and its many languages and traditions. 'This diversity is not a weakness. It is a source of unity, a quiet strength that holds our societies together,' he said. He said there is potential to deepen bilateral cooperation with Singapore, in areas such as tourism, education, infrastructure and investment. Highlighting Timor-Leste's natural beauty, from mountain ranges to tropical beaches rich in marine biodiversity, Mr Gusmao said his country's Blue Economy strategy underscores its commitment to sustainability. 'We welcome partnerships that align with that vision. Not just investment, but collaboration, knowledge-sharing and mutual growth,' he said. PM Wong also thanked Mr Gusmao and the government of Timor-Leste for a gift of 60 sandalwood saplings for Singapore's 60th year of independence. These saplings, he said, are a powerful symbol of how both countries can grow and thrive together in the years ahead – both bilaterally and in Asean. 'I assure you that Singapore will take good care of the saplings and make sure they grow into strong and sturdy trees; befitting of the enduring friendship between our two countries,' he said. - The Straits Times/ANN
