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View all search resultsIndonesia not out of woods despite US, EU deals
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US President Donald Trump displays a signed executive order imposing tariffs on imported goods during a “Make America Wealthy Again“ trade announcement event in the Rose Garden at the White House in Washington, DC, on April 2, 2025. (AFP/Andrew Hanik)
D
espite Indonesia’s recent success at scoring a significantly lower tariff rate with the United States and finalizing a long-awaited free trade pact with the European Union, experts have warned that the strategic implications behind these rushed decisions made under pressure may lead to future instability.
The US has granted Indonesia the lowest tariff rate in Southeast Asia, at 19 percent, following intense negotiations that culminated in a phone call between US President Donald Trump and President Prabowo Subianto earlier this week. The final rate marks a sharp reduction from the previous 32 percent, and is notably lower than Vietnam’s 20 percent, which defied expectations of deeper cuts.
Coordinating Economy Minister Airlangga Hartarto, who led Jakarta’s negotiating team in Washington, said the deal concluded what has become a months-long “extraordinary struggle” to reach a fairer deal with the US.
President Prabowo, meanwhile, welcomed the development by reaffirming the two countries’ commitment to ushering in “a new era of mutual benefit between two great nations.”
However, under the terms of the deal, Indonesia has agreed to allow all American goods to enter its market tariff-free, while also committing to purchases worth over US$19 billion—including $15 billion in energy products, $4.5 billion in agriculture and 50 Boeing aircraft.
Read also: Indonesia says US trade deal reached after 'extraordinary struggle'
While these commitments are being framed as a strategic investment in bilateral ties, some analysts question whether Indonesia gained enough in return.
