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Trump sets 19% tariff on Indonesia goods in latest deal, EU readies retaliation
Wednesday, 16 July 2025 04:43 WIB | ECONOMY |Asia

President Donald Trump on Tuesday said the U.S. would impose a 19% tariff on goods from Indonesia under a new agreement with the Southeast 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 U.S. trade deficit.

The pact with the relatively minor U.S. trading partner is among the handful struck so far by the Trump administration ahead of an August 1 deadline for tariffs on most U.S. imports to rise again, and it came as the top U.S. 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 U.S. beyond a baseline 10% 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 U.S. effective average tariff rates will rise to 20.6% from between 2% and 3% before Trump's return to the White House in January. Consumption shifts would bring the rate down to 19.7%, but it's still the highest since 1933.

Trump outlined an Indonesia deal that had rough contours resembling a pact struck recently with Vietnam, with a flat tariff on exports to the U.S. roughly double the current 10% and no levies placed on U.S. 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% 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 $15 billion of U.S. energy products, $4.5 billion of American farm products and 50 Boeing (NYSE:BA) jets, though no time frame for the purchases was specified.

Source: Investing.com

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