In another tariff deal, US President Donald Trump said he had agreed to lower tariffs he had threatened on goods entering the US from Indonesia to 19%. This is in exchange for what Trump called “full access” for American firms.
Indonesia’s President Prabowo Subianto said it marked a “new era of mutual benefit” with Washington, although the terms of the deal were not immediately confirmed by the country.
After suspending his most aggressive tariff plans from earlier this year, Trump this month renewed his threats, sending warning letters to dozens of countries that he intended to start charging high tariffs from 1 August.
Trump sent out warning letters to countries that he intended to start charging high tariffs from August 1.
His targets included all of America’s biggest trade partners, including the European Union, Canada, Mexico, Japan and South Korea.
Indonesia also received a letter from Trump last week outlining plans for a 32% tariff on its goods, reportedly bewildering officials who had thought an agreement was close.
Trump said on Tuesday he had reduced that rate after a phone call with the president of Indonesia.
He said as part of the deal, Indonesia had agreed to lower its trade tariffs for products from the US, which America has complained were high for many agricultural products as well as certain manufactured goods.
“They are going to pay 19% and we are going to pay nothing… we will have full access into Indonesia,” he said.
The country has also agreed to purchase $15bn (£11.2bn) worth in US energy, $4.5bn in American agricultural products and 50 Boeing jets, he later wrote on social media.
“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 wrote in an Instagram post, without providing details of the deal. He is expected to hold a news conference later in the day after he arrives back in Indonesia after visiting France.
Indonesia ranks as one of America’s top 25 trade partners, sending about $28bn to the US last year, including clothing, footwear and palm oil.