Key Points
- The U.S. agreed to lower a planned tariff on Indonesian goods from 32% to 19%. In exchange, Indonesia will buy billions in U.S. products.
- The deal includes a $15 billion commitment from Indonesia to buy American energy products.
- Indonesia will also purchase $4.5 billion in U.S. agricultural goods, including a major long-term wheat deal.
- The agreement involves Indonesia purchasing 50 Boeing jets, with state airline Garuda handling the deal.
U.S. President Donald Trump announced a new trade agreement with Indonesia, aimed at reducing a significant trade imbalance between the two countries. Under the agreement, Washington will lower a threatened tariff on Indonesian goods from 32% down to 19%.
In return, Indonesia has committed to purchasing billions of dollars’ worth of American energy, agricultural, and aviation products. The deal aims to shrink the nearly $18 billion trade surplus that currently favors Jakarta.
The energy part of the deal is the largest, with Indonesia committing to purchase $15 billion worth of U.S. energy products. The state energy company, Pertamina, has already signed initial agreements with American firms, such as ExxonMobil and Chevron, to purchase more crude oil and explore collaborations on refinery projects.
On the agriculture front, Indonesia will purchase $4.5 billion in American farm goods. A key part of this is a deal for Indonesian flour mills to purchase at least one million metric tons of U.S. wheat annually from 2026 to 2030. Noodle giant Indofood is among the Indonesian buyers, while U.S. suppliers include major companies like Cargill and Bunge. The agreement also covers soybeans, corn, and cotton.
For aviation, Indonesia committed to buying 50 jets from Boeing. The country’s state airline, Garuda Indonesia, is handling the purchase and stated that it is in talks to potentially acquire up to 75 new planes, including the 737 MAX 8 and 787 models.
