WASHINGTON / BRUSSELS, July 15 — President Donald Trump announced a new trade deal with Indonesia on Tuesday that will impose a 19% tariff on goods imported from the Southeast Asian nation, while allowing duty-free access for U.S. exports. The move is part of a broader effort by the Trump administration to aggressively reshape global trade relationships, as more nations face looming tariff hikes ahead of an August 1 deadline.
Indonesia, though not among the top 15 U.S. trading partners, exported nearly $40 billion worth of goods to the United States in 2024. The new deal doubles the existing 10% tariff on Indonesian imports and is similar to a recent preliminary agreement struck with Vietnam. Under the terms, Indonesia agreed not only to accept the higher tariff but also committed to purchase billions in U.S. goods, including energy products, agriculture, and 50 Boeing aircraft.
“We’re going to pay nothing, and they’re going to pay 19%. That’s full access for the U.S. into Indonesia,” Trump said, speaking to reporters outside the White House. He later posted on Truth Social that Indonesia had pledged to buy $15 billion in American energy products, $4.5 billion in farm exports, and commercial jets, although no specific timeline was given.
Rising Tensions with EU as Deadline Looms
The deal with Indonesia comes amid growing tensions between the U.S. and its largest trading partner—the European Union. As the August 1 deadline approaches, the EU is preparing retaliatory tariffs on over €72 billion ($84 billion) worth of American goods. European leaders have warned that Trump’s threatened 30% tariff on EU imports would severely damage transatlantic trade.
The European Commission has already circulated a list of potential countermeasures, targeting iconic U.S. exports like bourbon whiskey, cars, and Boeing planes. While the EU’s list predates Trump’s recent tariff announcements, officials say it will be expanded if talks with Washington fail.
Tariff Expansion Targets Global Partners
Trump’s new trade offensive isn’t limited to Indonesia and the EU. He confirmed that similar letters have been sent to nearly two dozen countries—including Canada, Japan, and Brazil—threatening tariffs ranging from 20% to 50%. A separate 50% tariff on copper is also under consideration.
In a speech in Pittsburgh, Trump defended his approach, saying he preferred blanket tariffs to what he called “slow and pointless” negotiations. Still, administration officials, including Treasury Secretary Scott Bessent and Commerce Secretary Howard Lutnick, are actively pursuing more bilateral trade agreements.
Negotiations are reportedly underway with several other nations hoping to avoid the sharpest tariff hikes. Trump said talks with India are progressing, and he expects a deal granting U.S. firms better access to India’s massive consumer market.
Pharmaceutical Tariffs on the Horizon
In addition to manufacturing and agricultural goods, Trump revealed plans to impose tariffs on pharmaceutical imports by the end of the month. The initial rate will be modest, allowing companies time to relocate production to the U.S., but the administration intends to raise that rate significantly within a year.
The effective average U.S. tariff rate is projected to jump from the pre-Trump average of 2–3% to 19.7%, the highest since 1933, according to analysts. While some countries may successfully negotiate limited exemptions, most are bracing for the broad application of higher duties.
Few Deals Finalized So Far
Despite the aggressive posture, only a few formal trade deals have been finalized since Trump returned to office. Agreements have been reached with the United Kingdom, Vietnam, and an interim pact with China aimed at delaying even steeper tariffs.
Trump has long promised swift results, famously pledging “90 trade deals in 90 days,” but progress has been slower than expected. Critics argue that the trade strategy, while aggressive, has often been chaotic and disruptive to global markets.
Still, with less than three weeks before the new tariffs take effect, nations around the world are rushing to negotiate and protect their exports from Trump’s sweeping trade overhaul.
