• Indonesia has negotiated a trade deal with the US lowering tariffs on exports from 32% to 19%.
• The agreement includes commitments for $15 billion worth of US energy, $4.5 billion in agricultural products, and 50 Boeing jets.
• This deal is seen as a diplomatic success, though analysts warn it may harm local farmers and create dependency on US imports.
• Trump labeled the agreement a "landmark deal," promising full access to the Indonesian market for US goods without tariffs.
• Economists have raised concerns about the broader impact on Indonesia's economy and trade policies.

Indonesia has secured a trade deal with the United States that reduces tariffs on Indonesian goods from 32% to 19%, a significant outcome from negotiations led by President Prabowo Subianto and President Donald Trump. Trump's announcement specified that the new tariff structure aims to enhance bilateral trade, offering the US "complete and total access" to the Indonesian market while imposing a reduced rate on Indonesian exports, which will include substantial purchases of US goods valued at $15 billion in energy, $4.5 billion in agricultural products, and 50 Boeing jets, many of which are 777s, according to The Jakarta Post and Bangkok Post.

Trump's original threat of a 32% tariff was made in early July, with room for negotiation given until August 1. This led to intense discussions that culminated in the recent agreement, described as an "extraordinary struggle" by Indonesian officials. The final tariff levels were presented as favorable when compared to neighboring countries, notably Vietnam, which is subjected to a 20% tariff under a similar agreement, as reported by Channel News Asia and Al Jazeera.

While the deal has been applauded in Jakarta as a diplomatic success, some analysts warn it may adversely affect local agriculture due to the influx of US agricultural products that could undermine local farmers. This concern is echoed by local economists, noting that potential reliance on imports such as wheat and soy from the US could impact Indonesia's agricultural self-sufficiency, as stated by South China Morning Post and The Jakarta Post.

Furthermore, economists have expressed apprehension regarding the negotiations' outcomes for Indonesia's broader economic stability. The concern is heightened given a previously established trade surplus with the US of $17.9 billion in 2024, leaving much to analyze regarding future export dynamics and potential job losses in vulnerable sectors such as local farming and manufacturing. Le Monde highlights that while the deal may be beneficial short-term, questions remain about long-term impacts on Indonesia's negotiating power.

As Indonesia moves forward, the implications of this trade deal could resonate beyond bilateral relations with the US, potentially affecting ties within ASEAN and driving other nations to reconsider their trade strategies in light of changing global economic landscapes. Analysts warn that while tactical agreements may seem advantageous, sustainable growth and stability require cohesive regional cooperation and shared frameworks, according to Channel News Asia.