Indonesia has welcomed what it described as a “new era” in its economic ties with Washington after President Donald Trump pledged to cut tariffs on Indonesian exports from 32 percent to 19 percent.
President Joko Widodo announced the development on Wednesday, noting it marked a turning point for trade with the United States, Southeast Asia’s largest trading partner.
The Trump administration, which has faced mounting pressure to finalise promised trade agreements, is racing to conclude deals with multiple countries ahead of its self-imposed August 1 deadline for imposing sweeping new import tariffs.
“I had a very good call with President Donald Trump. Together, we agreed and concluded to take trade relations between Indonesia and the United States into a new era of mutual benefit,” President Prabowo Subianto wrote on Instagram.
Prabowo confirmed the new tariff rate after landing back in Indonesia from Europe.
“We agreed… the tariffs to be lowered from 32 (percent) to 19 (percent),” he told reporters, adding he could visit Washington in September or October.
Prabowo, a populist former general, posted pictures of himself laughing on the phone with Trump, but did not give any specifics about their trade deal.
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Prabowo’s presidential spokesperson confirmed the 19 percent rate and said it was struck after direct negotiations.
“It is an extraordinary negotiation conducted directly by our president with President Donald Trump,” spokesperson Hasan Nasbi said, adding that the deal was “progress that cannot be called small”.
President Donald Trump announced that Indonesia would benefit from reduced tariff rates following Jakarta’s commitment to make major purchases from the United States, including an agreement to buy 50 Boeing aircraft.
Under the deal, Indonesia is expected to invest billions of dollars to boost its imports of American energy products, agricultural goods, and other merchandise.
Trump’s ties with Indonesian President Prabowo Subianto have grown notably strong since his first election win in 2016. Their diplomatic warmth was further cemented when Washington invited Prabowo—who was Indonesia’s defence minister at the time—for an official visit in 2020, effectively ending a long-standing visa restriction imposed over human rights allegations dating back to the era of former dictator Suharto.