US Sees $50 Billion in Indonesia Market Access Under Trump Deal

A worker operates a forklift to transport sacks of cement at the Sunda Kelapa Port in Jakarta. Photo by Dimas Ardian /Bloomberg

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(Bloomberg) — The Trump administration expects that Indonesia’s decision to bring down trade barriers will result in at least $50 billion in additional market access for US goods. 

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“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,” President Donald Trump said in social media post Tuesday as officials shared more details on the agreement.

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Indonesia will eliminate all non-tariff measures on US goods and drop an effort to tax the flow of data and support that could have hit American tech companies, according to a senior administration official who on Tuesday offered new details of the agreement Trump announced last week. 

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The $50 billion includes the estimated value of new market access as well as purchases Indonesian companies intend to make of US goods, including liquefied natural gas, oil and agricultural commodities, the senior administration official said.

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The agreement, one of just a handful Trump has announced ahead of his Aug. 1 tariff deadline, will be implemented in the coming weeks, the official said. Indonesian imports will face a 19% tariff, while almost all US goods won’t be charged import taxes. That’s down from the 32% rate Trump initially threatened to charge. 

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Trump is poised to fall short of the dozens of deals the White House promised when he first paused his higher tariffs in April. His team is now mounting a new effort to defend his negotiating posture as beneficial to US manufacturers. 

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Under the agreement with Indonesia, a separate 40% tariff would apply to goods that are transshipped or contain significant content from other countries, particularly non-market economies, the senior administration official said. 

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Transshipment has been a major concern for Trump’s trade advisers, who are eager to limit the use of what they say are heavily subsidized inputs from China and Vietnam for only minimal final manufacturing in other nations before final goods are shipped to the US.

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Full details of how the agreement would address transshipped goods — including those that are minimally processed in Indonesia with inputs from China, Vietnam and other so-called non-market economies — were not immediately available. The official said the terms of what constitutes a transshipped good through Vietnam would be provided in a later document.

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Trump announced the broad agreement on social media a week ago, including plans for Indonesia to buy Boeing Co. jets. But no formal joint agreement had been issued by the two countries outlining more specific terms.