Trump Strikes Trade Deal With Indonesia, Averting Tariff Clash and Opening U.S. Access to Key Resources

by Worthy News Washington D.C. Bureau Staff

(Worthy News) – President Donald Trump on Tuesday announced a preliminary trade deal with Indonesia, just days after threatening a 32% tariff on the Southeast Asian nation. The agreement marks the fourth such deal since Trump launched his aggressive “reciprocal tariffs” campaign in April aimed at closing America’s trade deficit and boosting U.S. exports.

“They are going to pay 19%, and we are going to pay nothing. I think it’s a good deal for both parties,” Trump told reporters on the White House lawn. “I spoke to their really great president — very popular, very strong, smart — and we made the deal.”

The announcement was made via both public remarks and a post on Trump’s Truth Social account, where he praised Indonesian President Prabowo Subianto and highlighted the country’s “great products,” particularly its high-quality copper. Indonesia is the world’s third-largest exporter of copper ore and holds the largest known reserves of nickel, both of which are critical for electronics, energy, and defense manufacturing.

The new deal reportedly eliminates tariffs on U.S. exports to Indonesia while locking in a 19% rate on Indonesian goods entering the United States—a sharp drop from the 32% levy Trump had slated to take effect on August 1.

Commerce Secretary Howard Lutnick summarized the arrangement in a CNBC interview, stating that the deal “switches the asymmetry,” imposing tariffs on Indonesia’s exports while giving American goods free access to the archipelago nation of 290 million people.

The U.S. trade deficit with Indonesia reached $17.9 billion in 2024, a 5.4% increase from the previous year, according to the U.S. Trade Representative’s Office. Indonesia primarily exports consumer electronics, apparel, footwear, palm oil, and spices to the United States — but is not currently among America’s top 20 trade partners.

The deal comes amid a flurry of Trump-led trade negotiations. Since his April 2 announcement of global reciprocal tariffs, the White House has reached deals with the United Kingdom, Vietnam, and China. Those agreements — each with varying tariff levels ranging from 10% to 30% — also included provisions to open foreign markets to American ethanol, meat, and technology exports.

U.S. officials have argued that longstanding Indonesian trade barriers, including non-tariff restrictions and discriminatory policies against U.S. companies, have unfairly limited access to the Indonesian market. Trump’s strategy, officials say, forces countries to either strike a deal or face stiff penalties.

The deadline for countries to avoid sweeping U.S. tariffs remains August 1. Nations such as Japan, South Korea, and the European Union, all major trading partners, have yet to finalize agreements with Washington. Trump has made it clear: “No extensions will be granted.”

The broader trade war is now intersecting with domestic economic concerns. June’s Consumer Price Index report showed inflation rising to 2.7% annually, up from 2.4% in May. Core inflation rose to 2.9%, complicating the president’s efforts to pressure the Federal Reserve to lower interest rates, which have remained unchanged amid concerns about potential inflation driven by tariffs.

Despite this, Trump officials insist the U.S. economy remains on solid footing. National Economic Council Director Kevin Hassett dismissed concerns about inflation in a CNBC interview, stating that Americans are embracing economic nationalism. “Because of President Trump’s leadership, people understand that buying American means strengthening their community,” Hassett said.

Looking ahead, further trade data and pricing indexes will be released later this week. For now, the Indonesia deal gives the White House another win in its global tariff campaign — and keeps Trump’s push for trade rebalancing on track as the August 1 deadline approaches.

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