World

US and Indonesia reach tariff deal

Jul 17, 2025 United States

Both the US President Donald Trump and the Indonesian President Prabowo Subianto said that the tariffs faced by the Southeast Asian country would be reduced from 32% to 19%

The US President first announced on Truth Social that a deal had been reached with Indonesia ahead of the 1^st of August deadline. Under the terms of the latest agreement, Indonesian goods will be subject to a 19% tariff, which is a reduction from the 32% threat tariff announced in April and in the letter sent in July.

He later added that US exports to the Southeast Asian country would be exempt from tax and that Indonesia had agreed to purchase 15 billion US dollars’ worth of US energy products, 4.5 billion US dollars’ worth of American farm products, and 50 Boeing aircraft, although no timeframe was specified.

On Wednesday, Indonesia’s president, Prabowo Subianto, confirmed the broad outlines of a trade agreement with the US that had been reached after several months of negotiations. Describing Trump as “quite a tough negotiator”, he suggested that Indonesia had hoped for lower tariffs and would continue to negotiate.

According to the Footwear Distributors & Retailers of America (FDRA), this deal is significant because Indonesia is the third-largest supplier of footwear to the US market, supplying 166 million pairs annually. The organisation continues to urge the administration to prevent additional tariffs from being added to the already high tariffs on footwear.

Image Credits: Bisma Mahendra on Unsplash

Indonesia United States Economy FDRA International Trade Tariffs Trump tariffs