Latest news with #tariff reduction
Reuters
2 days ago
- Business
- Reuters
Indonesia still negotiating details, exemptions on U.S. tariff deal, official says
JAKARTA, July 18 (Reuters) - Indonesia is still negotiating the details of its recently-reached trade deal with the United States after the latter lowered tariff rates on the Southeast Asian country, and is pursuing exemptions for its exports of palm oil and nickel, an official said on Friday. The two countries reached a trade deal that led to a reduction in the proposed tariff rate to 19% from 32%. The deal was one of only a handful reached so far by the Trump administration ahead of the August 1 negotiation deadline. Susiwijono Moegiarso, a senior official at the country's economic ministry, told reporters that the two countries are still negotiating the fine details of the agreement, adding that the 19% rate will be imposed on top of existing sectoral tariffs. Indonesia has asked the United States to exempt its exports of cocoa, rubber, crude palm oil and nickel from the levy, he said, adding that U.S. technology products will also be exempted from Indonesia's "local content" rules, which require companies to use locally-made components in its manufacturing. Indonesia is the world's biggest palm oil producer and the biggest supplier to the United States, accounting for 85% of its total imports in 2024. "This is a good opportunity, this will become a good factor for us," Susiwijono said. "The deal should be good to support our exports." Indonesia will also buy jets for its flag carrier Garuda Indonesia ( opens new tab from Boeing, and its state energy firm Pertamina ( will also import energy from the United States, subject to business reviews, Susiwijono said. He added that all U.S. goods imported into Indonesia will face zero tariffs, with the exception of alcoholic drinks and pork, and some U.S. goods will be exempted from import quota rules.
Al Jazeera
4 days ago
- Business
- Al Jazeera
Indonesia's Prabowo hails ‘new era' in US ties after Trump trade deal
Indonesia's leader has welcomed United States President Donald Trump's announcement that he will slash tariffs for Southeast Asia's biggest economy, hailing the beginning of a 'new era of mutual benefit'. Indonesian President Prabowo Subianto's remarks on Wednesday came after Trump said he had sealed a trade deal with Jakarta under which his tariff rate would fall from 32 percent to 19 percent. 'I had a very good call with President Donald Trump,' Indonesian President Prabowo Subianto said in a post on Instagram on Wednesday. 'Together, we agreed and concluded to take trade relations between Indonesia and the United States into a new era of mutual benefit between our two great nations. President Trump extends his warm regards to the people of Indonesia.' Prabowo's presidential spokesman, Hasan Nasbi, told a news conference that the agreement was the culmination of an 'extraordinary effort' by Indonesia's negotiating team. 'So if we use an analogy, there is a house that built a fence, and the fence was initially 32 for us. After negotiations, the fence could be lowered to 19,' Nasbi told local media in Jakarta. 'Yes, of course, this is progress that cannot be called small progress, nor can it be considered a minor achievement.' Nasbi declined to elaborate on the details of the agreement beyond the lower tariff rate, saying Prabowo would provide more information upon returning from his state visit to France. In his initial announcement of the deal on Truth Social on Tuesday, Trump said Indonesia had agreed to buy $15bn of US energy exports, $4.5bn of US agricultural products, and 50 Boeing jets. Trump said later on Tuesday that the US exporters would have 'full access to everything' and pay no tariffs. 'They are going to pay 19 percent, and we are going to pay nothing,' Trump told reporters at the White House. 'I think it's a good deal for both parties.' Indonesia ranked 24th among the US' top trading partners in 2024, with two-way goods trade worth $38.3bn, according to the Office of the US Trade Representative. The US had a $17.9bn trade deficit with Indonesia the same year, according to the trade office.
CNA
4 days ago
- Business
- CNA
Indonesia says US trade deal reached after 'extraordinary struggle'
JAKARTA: Indonesia said on Wednesday (Jul 16) it had reached a trade deal with the United States after an "extraordinary struggle" in negotiations, which resulted in a reduction of proposed US tariff rates on Indonesian goods to 19 per cent from 32 per cent. US President Donald Trump on Tuesday said a deal had been struck after he spoke to Indonesian President Prabowo Subianto. The deal is among only a handful reached so far by the Trump administration ahead of an Aug 1 deadline for negotiations. "This is an extraordinary struggle by our negotiating team led by the Coordinating Minister for Economic Affairs," Hasan Nasbi, the Indonesian president's spokesperson, told reporters on Wednesday. He added that the deal was 'progress that cannot be called small'. Nasbi said Prabowo had also negotiated directly with Trump over the phone, without giving further details. He said Prabowo would hold a press conference to give additional details upon landing back in Indonesia after a foreign trip later on Wednesday. "LANDMARK DEAL" Indonesia - the world's fourth-largest country and a member of G20 - ran a goods trade surplus of US$17.9 billion with the United States in 2024, according to the US trade representative. The trade deal with Indonesia broadly resembles the framework for Washington's deal with Vietnam, with a flat tariff on exports to the US roughly double the current 10 per cent and no levies on US exports to Indonesia. It also included a penalty rate for so-called transshipments of goods from a 'higher tariff country', Trump said in a post on his Truth Social platform. He added that Indonesia had committed to purchasing US$15 billion in US energy, US$4.5 billion of American farm products and 50 Boeing jets. No time frame was specified for these purchases. It remains unclear when the new tariff rate for Indonesia will come into effect. 'This landmark Deal opens up Indonesia's ENTIRE MARKET to the United States for the first time in History,' Trump wrote on Truth Social. 'I think it's a good deal for both parties, but we will have full access into Indonesia and we have a couple of those deals that are going to be announced.' In particular, Trump indicated that copper would be something the US would be interested in importing from Indonesia. 'Now, Indonesia has some great product and they also have some very valuable earths and various other materials,' he told reporters on Tuesday. 'One of the things, as you know, they're known for is very high-quality copper, which we'll be using." "MEETING POINT" Nasbi, the Indonesian president's spokesperson, called the deal a "meeting point" between the two governments, noting that Indonesia's tariff rate was much lower than other countries in Southeast Asia. Indonesia's former vice minister for foreign affairs, Dino Patti Djalal, told a Foreign Policy event Tuesday that government insiders had indicated they were happy with the new deal. Indonesia's stock index rose as much as 0.7 per cent on Wednesday after the deal, which some analysts said would provide a positive catalyst for economic activities. "Well, 19 per cent is better than 32 per cent," Matt Simpson, a senior market analyst at City Index in Brisbane, said. "Indonesian non-oil exports such as footwear and textiles will take a hit, but energy and agriculture are set to gain. Officials are, of course, pleased because they're in Trump's good books," he added. However, some economists in Indonesia have hit out at the deal with Washington. "This is not an agreement. It's ... a one-sided agreement," Jakarta-based Centre for Strategic and International Studies (CSIS) executive director Yose Rizal Damuri told AFP on Wednesday. But he predicted American consumers would likely bear the costs more than Indonesian businesses, with Trump's tariffs sweeping across many countries. "The United States itself will be the one more affected. Prices will rise," he said.
