Indonesia Finalizes Tariff Deal with U.S., Faces 19% Import Duty
A 19% import duty was imposed on Indonesian goods entering the U.S. market as part of the formal trade agreement between the United States and Indonesia on July 15, 2025. After weeks of contentious back-and-forth negotiations between top officials from both nations, this agreement was reached. According to U.S. media outlets and the Indonesian Cabinet Secretariat, President Donald Trump and President Prabowo Subianto had a direct phone conversation at the end of the negotiation. Although the deal reduces the previously feared 32% tariff, many continue to question whether the 19% rate is a fair outcome for Indonesia, especially given the concessions made.
As part of the agreement, Indonesia also committed to purchasing 50 Boeing aircraft and a significant amount of American pharmaceuticals valued at over IDR 320 trillion, further raising concerns about the overall cost of the deal for Indonesia. This large-scale purchase raises concerns about Indonesia’s economic sovereignty. Committing over IDR 320 trillion to U.S. goods may disadvantage local industries, especially in aviation and pharmaceuticals. Critics argue it redirects public funds away from domestic development. While it may ease trade tensions, it could deepen Indonesia’s dependency on foreign products.
Local economists were taken aback by this circumstance. In a BBC News Indonesia interview, Dr. Lestari Widodo, an economist at the University of Indonesia, stated, “It feels like we gave in just to avoid a worse scenario.” While Indonesia portrayed the agreement as a compromise to maintain stable economic relations, the United States framed it as a victory for its industrial sector. Many are questioning who stands to gain the most from such a large purchase commitment.
According to CNN, a representative of Indonesia’s Trade Ministry said, “This was a tough deal to make.” “However, we made an effort to avoid being struck more severely.” One official likened the negotiation to haggling over rent, still expensive, but better than the worst-case scenario. From a student’s perspective, it’s like securing a lower rent: a compromise that stings, but feels necessary. Some worry that this agreement could strain Indonesia’s domestic industries, particularly if American imports oversupply the market and drive down local production.
The Indonesian government emphasized that the deal is a component of a broader plan to maintain open channels of international trade and prevent another economic shock. Experts and young professionals alike, however, are expecting greater openness and long-term planning as the specifics become clear. Regardless of whether this was a risky or necessary evil, one thing is certain: worldwide trade is all about bargaining power, and every percentage counts for nations like Indonesia.
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