Michael Hernandez
22 July 2025•Update: 22 July 2025
WASHINGTON
US President Donald Trump announced Tuesday the finalization of a "framework" trade agreement with Indonesia that he said will eliminate 99% of the tariffs imposed on US exports to the island nation.
"It is agreed that Indonesia will be Open Market to American Industrial and Tech Products, and Agricultural Goods, by eliminating 99% of their Tariff Barriers. The United States of America will now sell American Made products to Indonesia at a Tariff Rate of ZERO, while Indonesia will pay 19% on all of their products coming into the U.S.A.," Trump wrote on social media.
"In addition, Indonesia will supply the United States with their precious Critical Minerals, as well as sign BIG Deals, worth Tens of Billions of Dollars, to purchase Boeing Aircraft, American Farm products, and American Energy. This Deal is a HUGE WIN for our Automakers, Tech Companies, Workers, Farmers, Ranchers, and Manufacturers," Trump added.
A senior Trump administration official earlier Tuesday described the agreement as a "framework" that they said "shows exactly how the President is resetting the terms of trade to ensure that we can reduce our deficit, both by regulating imports and also expanding exports."
Besides eliminating nearly all tariffs on US exports to Indonesia, the agreement seeks to address "a range of non-tariff barriers" on agricultural and industrial US exports via exemptions on content requirements and licensing regimes, and other measures, the White House said in a statement.
The official who spoke to reporters on condition of anonymity said that some Indonesian exports would face trade duties above the 19% rate established in the agreement. That includes goods that are shipped through Indonesia to US markets, "or contain a lot of content from" third-party nations, which will face a 40% tariff.
Several of the agreement's provisions remain to be negotiated, however, including the removal of digital trade barriers, and strengthening rules to ensure that the agreement's benefits can only be reaped by Indonesia and the US rather than third-party countries.
The announcement comes just over a week before the US president's Aug. 1 deadline for nations to strike new trade agreements with Washington or face heightened tariffs. The original July 9 deadline was pushed back by the White House to give negotiators more time.
Peter Navarro, the US president's trade adviser, said in April, shortly after Trump announced his tariff push, that the administration would seek to conclude "90 deals in 90 days," but that goal has proved illusory. Prior to the Indonesia announcement, only two nations, the UK and Vietnam, concluded interim trade deals with Trump.
A separate trade truce with China reduced some tariffs between the world's top two economies.
