Jakarta, July 17, 2025 — Indonesia has declared the start of a “new era” in its relationship with the United States after President Donald Trump finalized a sweeping trade agreement that slashes tariffs and secures billions in American exports.
President Prabowo Subianto hailed the deal as a landmark moment, saying he had a “very good call” with Trump that led to the agreement. “Together, we agreed and concluded to take trade relations between Indonesia and the United States into a new era of mutual benefit,” Prabowo posted on Instagram, alongside photos of him smiling during the call.
Under the pact, Indonesian goods entering the US will face a 19% tariff, significantly lower than the 32% rate Trump had previously threatened. In exchange, Indonesia has committed to purchasing $15 billion in US energy, $4.5 billion in American agricultural products, and 50 Boeing jets, many of them 777s.
Presidential spokesman Hasan Nasbi described the outcome as “extraordinary,” emphasizing that the negotiation was conducted directly between the two leaders.
The agreement comes amid Trump’s broader push to reshape global trade through aggressive tariff diplomacy. Earlier this year, he imposed a blanket 10% tariff on most trading partners, with plans to escalate duties unless bilateral deals were reached. Indonesia, along with Vietnam and the UK, has now secured exemptions through direct negotiations.
Despite the celebratory tone from Jakarta, some economists have raised concerns about the deal’s long-term implications. Bhima Yudhistira Adhinegara, executive director of the Center of Economic and Law Studies, warned that the 19% tariff on Indonesian exports, coupled with zero tariffs on US goods, could pose a “significant risk” to Indonesia’s trade balance.
Still, the pact is seen as a diplomatic win for Prabowo, who has cultivated a warm rapport with Trump since his first term. The deal also positions Indonesia favorably ahead of the August 1 deadline, when Trump’s new tariff regime is set to take effect globally.
As Prabowo returns from a European tour, he is expected to deliver a formal statement outlining the full scope of the agreement and its anticipated impact on Indonesia’s economy. For now, the mood in Jakarta is one of cautious optimism, with officials touting the deal as a strategic breakthrough in navigating an increasingly transactional global trade landscape.
Indonesia Celebrates ‘New Era’ in US Relations Following Trump Trade Pact
