Indonesia Nears $34B US Trade Deal Ahead Tariff Deadline

Indonesia is on the cusp of securing a significant trade and investment agreement with the United States aimed at averting a 32% US tariff on Indonesian exports set to take effect on July 9. The deal, valued at approximately $34 to $52.3 billion, involves Indonesia increasing imports of US fuels and expanding investments in energy and agriculture sectors in the US, with a memorandum of understanding expected to be signed on July 7. Key elements include near-zero tariffs on over 1,700 US goods entering Indonesia and cooperation across critical sectors such as energy, defence, and aviation, potentially including a major aircraft purchase by Garuda Indonesia from Boeing. Indonesia hopes to negotiate better terms than those granted to Vietnam, which recently secured a tariff reduction to 20% from an initially proposed 46%. Despite optimistic government statements and coordinated efforts across public and private sectors, Indonesia's Trade Minister clarified that no formal agreement on tariff reductions has yet been reached, with negotiations ongoing. The deal could enhance bilateral economic and strategic ties, positioning Indonesia as a pivotal US partner in Southeast Asia amid shifting global trade dynamics.