INDONESIA SET FOR US TARIFF ON GOODS — TRUMP SETS 19% TARIFF UNDER TRADE DEAL
In a major escalation of his aggressive trade agenda, former U.S. President Donald Trump has announced a 19% tariff on all Indonesian imports into the United States. The move is part of a newly unveiled bilateral trade deal aimed at correcting what Trump described as a “massive trade imbalance” and reinforcing American manufacturing dominance.
The new tariff, which comes as part of a broader “America First” economic policy, will apply to a wide range of Indonesian goods including textiles, footwear, electronics, furniture, and processed foods. While Indonesia had been facing the threat of a steeper 32% tariff under Trump’s earlier proposals, the finalized 19% rate represents a partial compromise following weeks of backchannel negotiations.
As part of the agreement, Indonesia has pledged to make significant purchases from U.S. companies. This includes a commitment to buy 50 Boeing aircraft, roughly $15 billion in American energy exports such as liquefied natural gas (LNG), and an estimated $4.5 billion in U.S. agricultural products. Trump hailed the deal as a “historic win for American workers, farmers, and manufacturers,” claiming it would help narrow the trade deficit and create thousands of jobs.
“We are finally holding our trade partners accountable,” Trump said at a press conference. “Indonesia benefits from access to our market. Now it’s time they show respect by playing fair.”
However, the move has sparked criticism both at home and abroad. U.S. retailers and importers warn the tariff could lead to higher prices for American consumers, especially on everyday goods like shoes and apparel, which heavily rely on Indonesian supply chains. Economists also caution that such tariffs, while beneficial for some domestic industries, could stoke inflationary pressures at a time when the U.S. economy is already grappling with stubbornly high costs.
Indonesia has yet to fully confirm the terms of the agreement, though senior officials in Jakarta expressed concern over the tariff’s impact on small and medium-sized enterprises (SMEs), many of which rely on the U.S. market for export revenue. The country’s trade ministry said it would review its own trade policies and “respond strategically” to the U.S. decision.
Internationally, the deal has also raised alarm among U.S. allies and trade partners. The European Union, already at odds with Trump over earlier tariffs on steel, aluminum, and cars, warned it could introduce retaliatory measures if such unilateral trade moves continue. Similar warnings have been issued by India, Canada, and Japan, all of which have recently received U.S. notices regarding potential tariff hikes.
On Wall Street, the news rattled investors. The Dow Jones Industrial Average fell by nearly 1%, while Treasury yields rose slightly amid concerns that inflation might spike further due to rising import costs.
As Trump prepares for a potential return to the presidency in the 2024 election, the Indonesia tariff deal signals that his trade policies may again become a central feature of U.S. economic strategy. Whether the deal produces tangible long-term benefits or exacerbates global trade tensions remains to be seen. For now, businesses on both sides of the Pacific are bracing for a turbulent period ahead.