U.S. President Donald Trump said on Tuesday that he had struck a trade pact with Indonesia resulting in significant purchase commitments from the Southeast Asian country, following negotiations to avoid steeper tariffs.
Indonesian goods entering the United States would face a 19 percent tariff, Trump said in a post on his Truth Social platform. This is significantly below the 32 percent level the president earlier threatened.
"As part of the Agreement, Indonesia has committed to purchasing $15 Billion Dollars in US Energy, $4.5 Billion Dollars in American Agricultural Products, and 50 Boeing Jets, many of them 777's," Trump wrote.
The Trump administration has been under pressure to wrap up trade pacts after promising a flurry of deals recently, as countries sought talks with Washington to avoid the U.S. president's tariff plans. But Trump has so far only unveiled other deals with Britain and Vietnam.
Under the deal, which was finalized after he spoke with Indonesian President Prabowo Subianto, goods that have been transshipped to avoid higher duties would face steeper levies, he said on social media.
He separately told reporters that other deals were in the works, including with India, while talks with the European Union are continuing.
Indonesia's former vice minister for foreign affairs, Dino Patti Djalal, told a Foreign Policy event on Tuesday that government insiders had indicated they were happy with the new deal.
Tariff letters
Trump threatened Indonesia with a 32 percent tariff rate effective August 1 in a letter sent to its president last week. He sent similar letters to roughly two dozen trading partners this month, including Canada, Japan and Brazil, setting blanket tariff rates ranging from 20 percent up to 50 percent, as well as a 50 percent tariff on copper.
Trump also said on Tuesday he planned to place over 10 percent tariffs on smaller countries, not least those in Africa and the Caribbean.
"We'll probably set one tariff for all of them," Trump told reporters at Joint Base Andrews in Maryland. It could be "a little over 10 percent tariff" on goods from at least 100 nations, he added.
EU readies retaliation
The breakthrough with Indonesia came as the European Commission, the EU's governing body, gets set to target 72 billion euros ($84.1 billion) worth of U.S. goods – from Boeing aircraft and bourbon whiskey to cars – for possible tariffs if trade talks with Washington fail.
Trump is threatening a 30 percent tariff on imports from the EU from August 1, a level European officials say is unacceptable and would end normal trade between two of the world's largest markets.
The list, sent to EU member states, pre-dates Trump's move over the weekend to ramp up pressure on the 27-nation bloc and responds instead to U.S. duties on cars and car parts and a 10 percent baseline tariff.
The package also covers chemicals, medical devices, electrical and precision equipment as well as agriculture and food products – a range of fruits and vegetables, along with wine, beer and spirits – valued at 6.35 billion euros.
Asian economies seek new trading partners
Asian and other economies affected by Washington's tariffs are actively seeking new trading partners to soften the blow.
South Korean President Lee Jae-myung has dispatched special envoys to Australia and Germany to discuss defense and trade issues, with plans to send delegations to several other countries.
Brazil and India have announced a plan to boost bilateral trade by 70 percent to $20 billion. Indonesia said it is close to reaching an agreement with the EU to eliminate most tariffs between the two sides.
In Thailand, business communities are making efforts to support themselves. Over the past three months, the Thai government has been too slow and passive in responding to Trump, Napon Jatusripitak, a visiting fellow and acting coordinator of the Thailand Studies Program at the ISEAS – Yusof Ishak Institute, told Chinese media the Paper.
The Federation of Thai Industries has launched a data collection initiative to support the government in tariff negotiations with the United States. Chief among Thai industries' concerns is that Vietnam and the UK have already reached a negotiating consensus with Washington – putting Thailand's auto sector at a competitive disadvantage.
Meanwhile, the long-stalled free trade negotiations among China, Japan and South Korea has been put back on the agenda. On March 30, the trio held a meeting in Seoul, where they pledged to strengthen free trade and accelerate negotiations on a comprehensive trilateral agreement.
Last week, at the ASEAN Plus foreign ministers' meetings in Kuala Lumpur, Chinese Foreign Minister Wang Yi also confirmed the completion of negotiations on version 3.0 of the China-ASEAN Free Trade Area and agreed to submit it for approval and signing at the leaders' meeting in October, signaling that China and ASEAN will continue to promote regional economic integration and build a high-level regional free trade network.
(With input from agencies)
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