Indonesia: Indonesia announced it had concluded a trade agreement with the United States following extensive discussions marked by what officials described as an "extraordinary struggle." The negotiations resulted in a reduction of US tariffs on Indonesian exports from 32 percent to 19 percent.
According to Thai News Agency, US President Donald Trump revealed on Tuesday that an agreement had been made with Indonesia following discussions with Indonesian President Prabowo Subianto. This deal is among the few that the Trump administration successfully finalized before the August 1 deadline for negotiations.
Indonesian presidential spokesman Hasan Nasbi informed reporters that the negotiations were led by the coordinating minister for economic affairs. President Prabowo had direct communication with Trump via phone, though specific details were not disclosed. Prabowo is expected to address the media after his overseas return. Through an Instagram post, Prabowo noted that the agreement marks a new chapter in trade relations with the US, describing the phone call with Trump as 'very good.' Nasbi emphasized the agreement as a 'meeting point' between the two nations, highlighting Indonesia's tariff rates as notably lower compared to other Southeast Asian countries.
Trump stated that as part of the trade deal, Indonesia agreed to purchase 50 Boeing planes, $15 billion in US energy, and $4.5 billion in US agricultural products. The deal mirrors a recent preliminary agreement with Vietnam, excluding tariffs on US exports to Indonesia and imposing penalties on Chinese goods transiting through Indonesia.
The announcement of the deal led to a 0.7 percent rise in Indonesia's stock index on Tuesday, which analysts suggest could positively impact economic activity. Non-oil exports like footwear and textiles may face challenges, but the energy and agriculture sectors are expected to gain. Economists at Maybank Indonesia view the deal favorably, noting Indonesia's advantage of lower tax rates compared to its Southeast Asian counterparts.