JAKARTA — Indonesia’s president said US counterpart Donald Trump was a “tough negotiator” after the two countries reached a trade deal that led to a reduction of proposed tariff rates to 19 percent from 32 percent.
The deal is among only a handful reached so far by the Trump administration ahead of an August 1 deadline for negotiations, but no details were immediately provided by Indonesia, Southeast Asia’s largest economy and a member of the G20.
Trump said Indonesia had committed to purchasing 50 Boeing jets, $15 billion in US energy supplies, and $4.5 billion in US agricultural products.
“We’ve agreed from 32 percent, if I’m not mistaken, lowered to 19 percent … I was still negotiating, but, I must say, he’s a pretty tough negotiator,” Indonesia President Prabowo Subianto told journalists on Wednesday after a phone call with Trump.
Prabowo, who was returning from overseas visits, including Brazil for the BRICS conference, said he had spoken to Trump. He added, while he understood the United States’ points of view in the talks: “We’ve given our offer, we cannot give more.”
Trump’s comments outlined an Indonesia deal similar to a preliminary pact struck recently with Vietnam, with no levies on US exports to Indonesia. It also included a penalty rate for so-called transshipments of goods from China via Indonesia.
Indonesia – the world’s fourth-largest country by population – ran a goods trade surplus of $17.9 billion with the United States in 2024, according to the US Trade Representative.
“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 earlier.
Nasbi said Indonesia’s tariff rate was much lower than other countries in Southeast Asia.
The Jakarta stock index rose as much as 0.8 percent on Wednesday after the deal, which Indonesia’s central bank said would provide a positive catalyst for economic activities. The JKSE is up 10 percent since early April.
The country’s central bankcut rates on Wednesday, saying the deal will have a positive impact on the archipelago’s exports and economic growth, and provide certainty to financial markets.
A report by Capital Economics said that the rate cut might have come anyway, but the trade deal helped by removing a key source of uncertainty.
“While details are still sparse, it appears to be similar to that agreed with Vietnam, with clamping down on re-routing from China, once again, a key target,” the report said.
Natixis warned the Indonesian economy would still be affected by Trump’s tariffs on China – Indonesia’s biggest trade partner.
“Well, 19 percent is better than 32 percent,” Matt Simpson, a senior market analyst at City Index in Brisbane, said.
