US imposes 19% tariff on Indonesia

On July 22, President Donald Trump announced a trade deal with Indonesia, under which Indonesia will pay a 19% tariff. 

“Indonesia will supply the United States with their precious Critical Minerals, as well as sign BIG Deals, worth Tens of Billions of Dollars, to purchase Boeing Aircraft, American Farm products, and American Energy,” according to a post from Trump on Truth Social. 

This announcement followed a similar deal made with the Philippines earlier the same day. 

According to a joint statement from the White House, the Agreement on Reciprocal Trade between the United States and Indonesia outlines a comprehensive framework to enhance bilateral trade by eliminating or reducing tariffs, addressing non-tariff barriers, and improving regulatory cooperation.

“Indonesia will eliminate tariff barriers, on a preferential basis, on over 99% of US products exported to Indonesia across all sectors, including for all agricultural products, health products, seafood, information and communications technology, automotive products, and chemicals, which will create commercially meaningful market access opportunities for the full range of US exports, supporting high-quality American jobs,” according to a White House fact sheet.

Both countries will develop favorable rules of origin and tackle trade barriers in priority sectors, including conformity assessment, labeling, intellectual property, and local content rules, according to the White House. Indonesia has pledged to remove licensing requirements on US goods, recognize US regulatory certifications, and support US exports of digital products by eliminating tariffs and supporting global digital trade norms.

Labor and environmental protections are emphasized, with Indonesia committing to upholding labor rights, strengthening enforcement, improving forest governance, and fighting illegal trade. The deal also includes commitments to enhance supply chain resilience and address global challenges in steel, fisheries, and critical minerals, with both nations enhancing trade security and enforcement cooperation. 

According to data from the Economic Development Partnership of North Carolina (EDPNC), year to date, through May, imports from Indonesia have increased by 20% from $347.7 million to $417.2 million. In contrast, state exports to Indonesia year to date through May have increased by 12% from $86 million to $96.3 million.

“President Trump announced that the United States and Indonesia have reached a new trade agreement under which most US exports to Indonesia will face zero tariffs,” Joseph Harris, fiscal policy analyst for the John Locke Foundation, told the Carolina Journal. “However, Indonesian products that contain substantial inputs from other nations, specifically China, will be subject to a 40% tariff. The new tariff structure appears to be designed to alter supply chain dynamics, incentivizing Indonesian manufacturers to localize production and reduce dependence on Chinese inputs.”

In addition, the United States and Indonesia acknowledge several upcoming commercial agreements between US and Indonesian companies, according to the joint statement. These include the procurement of aircraft, currently valued at $3.2 billion. There are also anticipated purchases of agricultural products — such as soybeans, soybean meal, wheat, and cotton — with an estimated total value of $4.5 billion. Furthermore, the two nations recognize expected deals involving energy products — including liquefied petroleum gas, crude oil, and gasoline — which are projected to be worth approximately $15 billion.

According to the USDA, approximately 1.61 million acres of soybeans were harvested in North Carolina in 2024, down about 10,000 acres from 1.62 million in 2023. Soybeans are among the top five cash crops in North Carolina.

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